KARACHI: Pakistan Stock Exchange (PSX) has advised all Trading Rights Entitlement Certificate (TREC) holders (brokers) update details including valid computerized national identity card (CNIC) of their clients, as Pakistan now stands grey-listed by the Financial Action Task Force (FATF) for its obscure financial transactions.
“All the Certificate Holders (brokers) are required to formulate and implement an effective internal policy and framework pertaining to Know-Your Customer (KYC), Customer Due Diligence (CDD) and Enhanced Due Diligence (EDD) in accordance with the guidelines issued on Anti Money laundering, Countering Financing of Terrorism and Proliferation Financing by the Securities and Exchange Commission of Pakistan (SECP),” a notice issued to the brokers said.
The PSX has advised the brokers that the KYC information of clients should be updated on periodic basis. It should also be ensured that CNICs of clients are not expired and are timely renewed.
Furthermore, such information must be kept updated in all related systems including the Central Depository System (CDS) of M/s. Central Depository Company of Pakistan.
Pakistan is a member of the Asia Pacific Group on money laundering, which falls under the FATF’s purview. “We were put on the grey list because we didn’t make enough progress on addressing the deficiencies in our regulations, which threatens the international financial system. Remember HBL, which was kicked out of New York with a fine of $225 million after it failed to comply with anti-money laundering regulations,” an analyst said.
“There is evidence that criminals laundering funds in Pakistan are purchasing real estate, abusing corporate entities to access financial sector, laundering money through trade and abusing formal channels in Pakistan,” the Asia Pacific Group had said.
Pakistan has made money laundering and terrorist financing a crime but it has not been able to enforce these laws effectively.