FMC issues norms for implementing provisions of PML Act
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In a bid to prevent money laundering and to combat financing terrorism, the Forward Markets Commission-FMC has issued guidelines for commodity markets.The guidelines, to be implemented with immediate effect, are broadly related to maintaining and monitoring of records of all transactions to help tracing of the audit trail of suspected trading account.
The FMC circular issued in Mumbai yesterday gives directions to bourses and their members relating to implementation of the provisions of the Prevention of Money Laundering (PML) Act 2002. As per the circular, the FMC has asked commexes to maintain all records of transactions and preserve information related to nature, amount, date and parties of transactions. FMC has further asked intermediaries to designate a director and principal officer for monitoring and reporting of all transactions and sharing of information as required under the PML Act.
In the circular, FMC has also outlined procedures for client due diligence process, the policy for acceptance of clients and the risk-based approach to be followed for accepting clients. The circular adds that a monthly information on all transactions should be submitted to the Union Finance Ministry by the 15th day of the succeeding month.
In February 2013, commodity exchanges and their members were brought under the ambit of the Prevention of Money Laundering (PML) Act 2002. However, the guidelines for its implementation were issued on Thursday.
As many as 375 market entities, mostly brokers, faced action for lapses in their mechanism to prevent possible money laundering and terror financing activities during the last fiscal in primary markets.
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