Thursday, 19 August 2010 01:09 Iheanyi Nwachukwu   

http://www.businessdayonline.com/index.php?option=com_content&view=article&id=13831:compliance-with-anti-money-laundering-guidelines-as-rescue-bait-to-investors-funds&catid=58:investor&Itemid=304

The end, after all, appears to have come for the activities of Capital Market Operators (CMO) who in the past, have wittingly or unwittingly been involved in money laundering or terrorism financing, using investors’ funds. This is simply because the Securities and Exchange Commission (SEC) Anti-Money Laundering/Combating Financing of Terrorism (AML/CFT) guidelines have come to check such menace going forward. The need for these rules was born out from Section 13 (n), (aa) and (dd) of the Investments and Securities Act 2007, which empowers the SEC to protect the integrity of the securities market against all forms of abuse, fraudulent and unfair trade practices.

According to SEC, “given the prominence Anti–Money Laundering/Combating Financing of Terrorism (AML/CFT) issues have assumed in international financial circle and the risks they pose to the financial market globally and Nigeria in particular, a comprehensive and stringent provision to fight this menace has become imperative.”

SEC believes that the rules will guide Capital Market Operators (CMOs) in the implementation of the Know Your Customer (KYC) and Customer Due Diligence (CDD) requirements for the capital market.

SEC also believes that this action will not only minimise the risk faced by the stock market on laundering the proceeds of crime, but will also provide protection against fraud, reputational and other financial market risks. “Consequently, all CMOs are required to adopt a risk-based approach in the identification and management of their AML/CFT risk in line with the requirements of this manual,” the Commission stated.

Umaru Ibrahim, acting managing director/chief executive, NDIC, said: “It is unacceptable, immoral and illegal that people should go scot-free in money laundering. Government on its own part is doing everything possible to sanitise the financial system. We feel more needs to be done on regulators side to bring to book those accused.”

Ibrahim, however, thinks that the revival of the taskforce on money laundering and other related financial malpractices is vital at this time, especially to enable the regulators tackle fraud/money laundering cases that have emerged or might emerge in the cause of financial institutions doing business. Recently, Funsho Saheeb, an assistant commissioner of police from the Special Fraud Unit (SFU), noted that the major constraints the Unit was facing in the course of executing its duty was the actions of lawyers who query the rationale to investigate their clients.

Meanwhile, SEC has prescribed sanctions for non-compliance by Nigerian Capital Market Operators in the AML/CFT guidelines and other relevant anti-money laundering laws and regulations concerning CDD issues, non-rendition of prescribed reports as well as failure to keep appropriate records. “It is, therefore, in their best interest to ensure compliance at all times, consistent with the prescriptions contained herein,” noted SEC.