Prevention of Money Laundering Act, 2002 (PMLA)
The Prevention of Money Laundering Act, 2002 came into effect from 1st July 2005
Applicability of PMLA Act
Banking company Financial institution
Intermediary (which includes a stock broker, sub-broker, depository participant, share transfer agent, portfolio manager, other 12 of the SEBI Act, 1992)intermediaries associated with securities market and registered under section
Objectives
The Act is intended to supplement the law enforcement authorities activities, to detect proceeds derived from serious crimes and help to effectively prevent money laundering, terrorist financing, and recycling of illegally obtained money.,
In brief the objectives of AML are as follows :-
To prevent financial intermediaries from being used as a channel for the purpose of Money laundering & terrorist financing.
To preserve the integrity/stability of the Financial System. To work hand in hand with the regulators to flush money laundering and terrorist financing activities out of our financial system. What is Money Laundering?
Money Laundering is a process of making dirty money look clean. Money laundering is the process by which criminal attempt to hide and disguise the true origin and ownership of the proceeds of their criminal activities.
Through money laundering, the launderer transforms the monetary proceeds derived from criminal activity into funds with an apparent legal source.
Steps taken by P Suryakant Share & Stock Brokers Pvt. Ltd. :-
P Suryakant Share & Stock Brokers Pvt. Ltd. is fulfilling objective of AML program in 3 steps :-
Identification of clients
Monitoring of clients transactions
Reporting of suspicious transactions
Obligation of the client :-
Implementation of AML/CFT measure requires demand of certain information from investors which may be of personal nature or has hitherto never been called for. Such information can include documents evidencing source of funds/income tax return/bank records etc. This can sometimes lead to raising of questions by the client with regard to the motive and purpose of collecting such information. This document has therefore been prepared to sensitize the clients about requirements emanating from AML and CFT framework.
Clients are required to provide complete details at the time of account opening :-
Address proof
Identity proof
PAN
Income details
Clients are required to periodically update
Contact details
Financial details
Occupational details
The transactions executed by the clients need to be commensurate with the disclosed income details. Clients are required to provide requested explanation / details for suspicious transactions.