http://www.dailytimes.com.pk/default.asp?page=2010%5C08%5C22%5Cstory_22-8-2010_pg5_2

SECP directs for reporting dubious transactions to FMU

KARACHI: As part of anti-money laundering (AML) measures, the Securities and Exchange Commission of Pakistan (SECP) has issued instructions to all the exchanges and clearing houses to report the suspicious transactions reports (STR) and currency transactions reports (CTR) to the Financial Monitoring Unit (FMU).

Under the AML Regulations 2008, the apex regulator has asked all three exchanges - Karachi, Lahore and Islamabad, Central Depository Company (CDC), National Clearing Company of Pakistan Limited (NCCPL) and National Commodities Exchange Limited (NCEL) to file STR and CTR to the FMU.

According to details, the AML regulations define that it is justifiable to suspect any customer who is reluctant to provide normal information and documents required routinely by the financial institutions in the course of the business relationship.

Transactions that do not make economic sense, for example, a customer having a large number of accounts with the same financial institution, transactions in which assets are withdrawn immediately after being deposited, transactions that cannot be reconciled with the usual activities of the customer, transactions involving large amounts of cash and transactions involving structuring to avoid reporting or identification requirement fall under the ambit of suspicious transactions, must be reported to the FMU.

Transfer of money abroad by an interim customer in the absence of any legitimate reason, repeated transfers of large amounts of money abroad accompanies by the instructions to pay the beneficiary in cash have also been suspicious.

The stock exchanges have been asked to report transactions with complete details, such as purchasing of securities to be held by the financial institution in safe custody, where this does not appear appropriate given the customer’s apparent standing; requests by a customer for investment management services where the source of funds is unclear or not consistent with the customer’s apparent standing; large or unusual settlements of securities transactions in cash form and buying and selling of a security with no discernible purpose or in circumstances which appear unusual.