KARACHI: Pakistan Stock Exchange (PSX) has asked all brokers to provide information on ownership, status of beneficial ownership, unique identification number and the nature — foreign or domestic — of political exposed persons (PEPs) as early as Sept 5.
Issuing a notice to all market participants, the PSX in tandem with the Securities and Exchange Commission of Pakistan’s (SECP) Anti-Money Laundering and Countering Financing of Terrorism Regulations 2018 has advised the securities brokers to submit information on all PEPs and their beneficial owners.
Individuals classified as PEPs include “individuals in prominent positions such as senior politicians, senior government, judicial or military officials; senior executives of state corporations and their family members and close associates,” according to the Pakistan Stock Exchange (PSX) notice.
The stock exchange has advised brokers to submit aforementioned information to the exchange by emailing soft form (Excel format) to the firstname.lastname@example.org as well as in hard form signed by the Chief Compliance Officer and Chief Executive Officer by Sept 5.
The notice comes days after the SECP issued circular 16 intensifying its efforts to combat terror financing and money laundering. Under the directives in the circular, all companies having legal persons as their members/shareholders are required to maintain up-to-date information relating to their beneficial owners.
The regulator of the corporate sector advised all firms to obtain ultimate beneficial ownership information until the natural person exercising ultimate ownership or control and lying at the end of the ownership chain is revealed.
The PSX notice is in pursuance of complying with the 40 recommendations by the Fianacial Action Task Force (FATF) which serve as the standard for combating money laundering and terror financing.
Also Read: The missing FIPI at the PSX
Pakistan is a member of the Asia Pacific Group (APG) on Money Laundering, a FATF-style regional body. The country is required to adopt the FATF standards as per membership obligations, and must comply with the United Nations Security Council Resolution 1267.
The next meeting of the APG is scheduled for mid of this month in which Pakistan has to present progress made on the action plan to curb the susceptibility of its financial system for terror financing and money laundering purposes.
In June, FATF grey listed Pakistan’s financial system for “strategic deficiencies” in its Anti-Money Laundering and Counter Financing of Terrorism framework.
The PML-N government drew up an action plan to get Pakistan removed from the grey list. However, approval for the steps contained in the plan was obtained in June by the interim government in a meeting with FATF held in Paris.
Implementation of the plan began almost immediately with Securities and Exchange Commission of Pakistan issuing new guidelines to prevent the holding of benami properties, as well as exploratory forays by the state to find ways to choke off illegal currency exchanges, particularly at the borders, among other measures.
The biggest challenges are expected to come when the government moves to act against all persons and entities that have been designated by the UN as terrorists.
(This news/article originally appeared in DAWN on September 5th, 2018)