SECP sets up cell to fight money laundering

It will curb flow of illegal funds into capital markets, NBFCs, corporates

KARACHI: The Securities and Exchange Commission of Pakistan (SECP) has established an anti-money laundering cell to root out illegal funding in the country’s financial sector.

According to the SECP, the primary aim of the cell is to effectively address any potential source of money laundering in Pakistan.



“The efforts are expected to curb the potential of any ill-gotten money finding its way into capital markets, Non-Banking Financial Companies (NBFC) and corporate, not-for-profit and insurance sectors,” said the SECP in a statement.

“The cell is set up in line with the government’s agenda of combating money laundering and terrorist financing activities,” it added.

The department comprises senior officers of the SECP for each supervisory area.

Meanwhile, the regulatory body has approved thresholds for various sectors for reporting of investments made in the securities markets, NBFCs and insurance sector.

For life insurance products, the defined threshold is the annual premium of Rs5 million for a single life policy.

For securities’ brokers, the threshold is Rs5 million for an individual investor, Rs25 million for a corporate entity and Rs20 million for a propriety broker.

For asset management companies (AMCs), modarabas and NBFCs, the threshold is Rs100 million for corporate entities, Rs50 million for trusts and Rs10 million for individual investment.

However, no reporting will be required of financial institutions, public listed companies, licensed entities, AMCs, mutual funds, insurance companies and government administration or entities investing in AMCs, modarabas and NBFCs.

Furthermore, any donation of Rs5 million and more from a single source to a not-for-profit company will also be reported to the SECP.

The anti-money laundering cell will develop a database of such reports for its analysis on a consolidated basis and initiate further probe, wherever needed.



The establishment of the cell will bolster SECP’s efforts to curb money laundering and terrorism financing.

Additionally, it will help Pakistan attain a compliant assessment from the money laundering international assessors during the upcoming anti-money laundering and countering terrorism financing mutual evaluation assessment due in 2018.

Published in The Express Tribune, March 31^st, 2017.

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