ISLAMABAD: The Securities and Exchange Commission of Pakistan (SECP) has penalised many companies for maintaining incomplete clients’ database, reflecting violations of the (Anti-Money Laundering and Countering Financing of Terrorism) Regulations, 2020 (AML Regulations).

According to an order issued by the SECP against a company, the clients’ database maintained by the company was incomplete as certain critical information in respect of clients was found missing which raised doubts about the completeness, accuracy, and reliability of the database for the periodic screening and monitoring of clients and their associated persons. The SECP has imposed a penalty of Rs9,130,000 on the said company.

Through another order, the SECP has imposed a fine of Rs175,000 on an insurance company for violating mandatory requirements of regulations.

A penalty of Rs4,072,000 has been imposed on another insurance company which failed to install an alert system upon the expiry of the client database.

The company did not obtain documentary evidence regarding the source of income (business in the specific case) as per the record provided to the inspection team in respect of certain policies. Therefore, the respondent has contravened AML Regulations.

One of the orders revealed that the pertinent provisions of the statute have been violated, and respondents are liable to penal action in terms of Section 237 of the Act as a result of failing to electronically transmit the company’s interim financial statements for the period ended September 30, 2020, with the commission within the statutory timeframe pursuant to Section 237 of the Act read with the Commission’s Circular No 24 dated October 19, 2017.

In this case, the SECP has imposed a penalty aggregating Rs280,000. Through another order, the SECP has imposed a penalty of Rs50,000 on a company as the company has convened its AGM for the year ended June 30, 2020, with a delay on January 20, 2021.

Copyright Business Recorder, 2022