Amendments to Prevention of Money-laundering (Maintenance of Records) Rules, 2005
Summary
This circular notifies amendments to the Prevention of Money-laundering Rules regarding mandatory Aadhaar and PAN requirements for financial market intermediaries. It clarifies that despite GoI notifications extending submission deadlines pending Supreme Court judgment, SEBI maintains PAN as mandatory for KYC processes in securities markets. The document directs Stock Exchanges and Depositories to disseminate these provisions, amend bye-laws, and monitor compliance through audits.
Text
Government of India (GoI) had notified Prevention of Money-laundering (Maintenance of Records) Second Amendment Rules, 2017 making the Aadhaar number issued by the Unique Identification Authority of India (UIDAI) and Permanent Account Number (PAN) or Form No. 60 as defined in Income-tax Rules, 1962 mandatory for both new and existing accounts with the financial market intermediaries including securities market intermediaries.
Subsequently, GoI has issued the following notifications - i. PML (Maintenance of Records) Fifth Amendment Rules, 2017, regarding explanation of the term “certified copy” and a list of deemed OVDs for limited purpose of proof of address... ii. PML (Maintenance of Records) Sixth Amendment Rules, 2017, regarding acceptable documents in case the OVDs presented by a foreign national does not contain address details.
Further, as per PML notification dated March 31, 2018 issued by Department of Revenue, Ministry of Finance pursuant to the interim order dated March 13, 2018 of Hon’ble Supreme Court, the Central Government has extended the date of submission of Aadhaar Number, and Permanent Account Number or Form 60 by the clients to the reporting entity till a date to be notified subsequent to pronouncement of final judgment in W.P. (C) 494/2012 etc.
All the above notifications issued by GoI in relation to PML Rules are brought to notice for necessary compliance.
However, it is hereby clarified that for securities market, in terms of SEBI circular dated April 27, 2007, the requirement of PAN would continue to be mandatory for completing the KYC process.
The Stock Exchanges and Depositories are directed to: a. bring the provisions of this circular to the notice of the Stock Brokers and DPs... b. make amendments to the relevant bye-laws, rules and regulations... c. monitor the compliance of this circular through half-yearly internal audits and inspections; and d. communicate to SEBI, the status of the implementation...
In case of Mutual Funds, compliance of this circular shall be monitored by the Boards of Asset Management Companies and the Trustees and in case of other intermediaries by their Board of Directors.
Source: SecMarx — Amendments to Prevention of Money-laundering (Maintenance of Records) Rules, 2005. Verbatim text is public record; SecMarx structuring (linkage to applying orders) is cited to us.