Procedure for implementation of Section 12A of the Weapons of Mass Destruction and their Delivery Systems (Prohibition of Unlawful Activities) Act, 2005 – Directions to stock exchanges and registered intermediaries.
Summary
This circular directs SEBI-registered intermediaries and stock exchanges to implement the asset freezing procedures mandated by Section 12A of the WMD Act. It requires entities to maintain a Designated List, verify client details against it, and immediately report matches or suspicions to the Chief Nodal Officer at FIU-INDIA. Furthermore, intermediaries must prevent transactions involving designated persons, file Suspicious Transaction Reports, and notify SEBI's Nodal Officer.
Text
The stock exchanges and registered intermediaries are directed to comply with the procedure laid down in the said Order.
Maintain the list of individuals/entities (“Designated List”) and update it, without delay, in terms of paragraph 2.1 of the Order.
verify if the particulars of the entities/individual... match with the particulars of the Designated List and in case of match, stock exchanges and registered intermediaries shall not carry out such transaction and shall immediately inform the transaction details... to the Chief Nodal Officer (“CNO”), without delay.
run a check, on the given parameters, at the time of establishing a relation with a client and on a periodic basis to verify whether individuals and entities in the Designated List are holding any funds... In case, the clients’ particulars match... shall immediately inform full particulars... to the CNO, without delay.
send a copy of the communication, mentioned in paragraphs 4(ii) and 4(iii) above, without delay, to the Nodal Officer of SEBI.
prevent such individual/entity from conducting financial transactions, under intimation to the CNO, without delay, in case there are reasons to believe beyond doubt that funds or assets held by a client would fall under the purview of Section 12A (2)(a) or Section 12A(2)(b) of the WMD Act.
file a Suspicious Transaction Report (STR) with the FIU-IND covered all transactions in the accounts, covered under paragraphs 4(ii) and (iii) above, carried through or attempted through.
Reporting entities shall also comply with the provisions regarding exemptions from the above orders of the CNO and inadvertent freezing of accounts, as may be applicable.
Source: SecMarx — Procedure for implementation of Section 12A of the Weapons of Mass Destruction and their Delivery Systems (Prohibition of Unlawful Activities) Act, 2005 – Directions to stock exchanges and registered intermediaries.. Verbatim text is public record; SecMarx structuring (linkage to applying orders) is cited to us.