SECP amends AML/CFT regulations to promote transparency

September 26, 2023 (MLN): The Securities and Exchange Commission of Pakistan (SECP) has introduced important amendments to the Anti-Money Laundering and Countering Financing of Terrorism (AML/CFT) Regulations, 2020, as per a press release issued by the regulatory body today.

The notified amendments aim to enhance the scope of regulations to effectively combat financial crimes, control money laundering, and combat the financing of terrorism (CFT) while ensuring the integrity of its financial system.

The amendments to the SECP AML/CFT Regulations 2020 are the outcome of the National Risk Assessment 2023, in which SECP conducted a self-assessment of its AML/CFT regulatory framework against the criteria used in the FATF Assessment Methodology for assessing Technical Compliance of its AML/CFT regulatory framework.

The amendments, introduced post-stakeholder consultation, demonstrate SECP's commitment to enhancing the country's regulatory framework and aligning it with international best practices.

The amendments to the SECP AML/CFT Regulations 2020 primarily focus on expanding the regulatory framework to encompass measures specifically tailored for Customer Due Diligence (CDD) requirements related to account opening of Mentally Disordered Persons.

Under the revised regulations, an account will be classified as dormant after three years of inactivity, as opposed to the previous threshold of five years.

Furthermore, the updated provisions encompass guidelines regarding the reliance on third parties for CDD, as well as specific requirements applicable to the foreign branches of regulated entities and their subsidiaries.

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