ISLAMABAD: The apex regulator Securities and Exchange Commission of Pakistan (SECP) has instructed financial entities to execute significant internal risk management systems, policies, procedures and controls ascertaining whether their customers are politically exposed person (PEP) as per anti-money laundering regime.
On the advice of the central bank’s Financial Monitoring Unit (FMU), SECP has constituted regulations for financial entities to fight terrorism financing and money laundering which includes customer due diligence and ancillary recording keeping which come under its regulatory purview.
In this regard, the apex regulator has published draft Securities and Exchange Commission Anti-Money Laundering and Countering Financing of Terrorism (AML/CFT) Regulations, 2018 on Monday.
The SECP draft regulations said “Foreign PEPs means individuals who are or have been entrusted with prominent public functions by a foreign country, for example, heads of State or of government, senior politicians, senior government, judicial or military officials, senior executives of state-owned corporations, important political party officials. Domestic PEPs mean individuals who are or have been entrusted domestically with prominent public functions, for example, Heads of State or of government, senior politicians, senior government, judicial or military officials, senior executives of state-owned corporations, important political party officials.”
It added,” Persons who are or have been entrusted with a prominent function by an international organization means members of senior management, i.e. directors, deputy directors and members of the board or equivalent functions.”
According to the draft regulations for foreign PEPs, financial entities have been directed to carry out enhanced due diligence in conformity with regulation and following other requirements of these regulations.
And for domestic PEPs, in which business relationship shows a major threat, financial entities should execute enhanced due diligence in conformity with regulation and following other requirements of these regulations.
