Sebi warns SEs on illicit foreign money

Apart from the possible black money flow, it is the terror financing risks that go with such fund flows which the market regulator is wary of and hence the circular to all bourses.

It may be noted that Iran and North Korea have been subjected to various sanctions by the US and some European countries to thwart the flow of funds allegedly used to finance their nuclear weapon ambitions and sponsor terror-related activities.

A circular issued by the National Stock Exchange's investigation department on Tuesday to the bourse's members, said that Sebi in a letter dated May 5 has informed it about Iran and North Korea not having appropriate 'anti-money laundering and combating the financing of terrorism' norms.

Advisory board

The Sebi advisory to stock exchanges, who work as front-line regulators for Indian market, follows a similar warning from RBI to banks and financial institutions in March.

The RBI and Sebi had last issued such a warning in January about Iran. As per the FATF warning, all financial institutions have been advised to give special attention to business relationships and transactions with Iran and North Korea, as well as their companies and financial institutions.

The FATF has urged member countries to take into account the risk of money laundering and terror-financing when considering requests by Iranian and North Korean financial institutions to open branches and subsidiaries.

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