PMLA rules: BSE seeks Aadhaar readiness report from members

New Delhi: To ensure compliance with prevention of money laundering rules, leading exchange BSE has asked trading and clearing members to report preparedness for furnishing Aadhaar details of their clients by the year-end.

In June, the government had amended the Prevention of Money Laundering (Maintenance of Records) Rules. According to two separate BSE notices, trading members have to "report on their preparedness and highlight issues, if any, with regard to compliance" with the amended PML rules.

While trading members have to submit report on their preparedness by August 23, clearing members and custodians have to do the same by August 25. "The Prevention of Money Laundering (Maintenance of Records) Rules, 2005 has been amended as per the gazette notification dated June 1, 2017, inter alia, to provide for submission of Aadhaar number, where the client enters into an account based relationship with reporting entity," BSE said in one of the notices.

The two notices were issued last week.

In the case of companies, a manager, officer or employees holding "attorneys to transact" on a company's behalf have to submit their Aadhaar details. With regard to partnership firm, trust and unincorporated association or body of individuals, the person holding attorney to transact on the entity's behalf has to provide Aadhaar details to the exchange.

For the purpose of reporting, the exchange has created a page in its electronic filing system for trading members while a reporting format has been provided for clearing members and custodians.

Clearing Members are members of the clearing houses or clearing corporations who facilitate settlement of trades done on stock exchanges. Custodians are clearing members and settle trades on behalf of their clients.

In compliance with the amended PML norms, banks have already sought Aadhaar details from their customers. As per the amended PML rules, where the client has not submitted Aadhaar number at the time of commencement of account-based relationship with the reporting entity, then the same should be furnished within six months. The period would be calculated from the date of starting the account-based relationship.

For clients having an account-based relationship with reporting entities prior to June 1, Aadhaar details have to be submitted by December 31, 2017.

In case of failure to submit the documents within the prescribed time limit, the account would be suspended till the Aadhaar details are submitted by the client.

BSE had also said that it is required to report to the Sebi on the preparedness of the trading members with respect to compliance with the amended rules.