Customers from high-risk states: SECP for taking countermeasures while carrying out business

The Securities and Exchange Commission of Pakistan (SECP) has directed securities brokers, insurance companies, non-banking finance companies (NBFCs) and Modarabas to take countermeasures while carrying out business relationship and transactions with customers from high risk countries.
According to the draft amendments in the Securities and Exchange Commission of Pakistan (Anti Money Laundering and Countering Financing of Terrorism) Regulations 2018 issued here on Wednesday, the regulated persons (securities brokers, insurance companies, NBFCs and Modarabas) shall adopt countermeasures, including but not limited to, enhanced due diligence proportionate to the risk, to the business relationship and transactions with their customer, from countries for which this is called upon by Financial Action Task Force (FATF) and/or as notified by the federal government.
The Commission, on the advice of the federal government regarding weakness in the AML/CFT systems of other counties, shall direct the regulated person to adopt appropriate measures in accordance with these regulations with the customers of such countries, the SECP added.
Through another major amendment in the Securities and Exchange Commission of Pakistan (Anti Money Laundering and Countering Financing of Terrorism) Regulations 2018, NBFCs, securities brokers, insurance companies and Modarabas should monitor the relationships with the entities or individuals on a continuous basis and ensure that no such relationship exists directly or indirectly, through ultimate control of an account and where any such relationship is found, the regulated person shall take immediate action as per law, including freezing the funds and assets of such proscribed entity/individual and reporting to the SECP.
A regulated person shall be required to implement counter money laundering (ML) and terrorist financing (TF) measures, which have regard to the ML and TF risks and the size of the business, the SECP added.