Keep vigil on terror funds, Sebi tells SEs

In a bid check flow of funds for terror activities, market watchdog Sebi has directed all stock exchanges and other securities intermediaries to inform Union Home Ministry about any suspected clients making investments in the country.

Market regulator Sebi has also asked the exchanges to keep a strict watch on entities that have been listed by the United Nations as organisations funding terror activities in the world and inform the concerned officials within 24 hours.

The list also contains the name of underworld don Dawood Ibrahim, who has been accused of funding the activities of banned terror outfit al Qaeda.
“In the event, particulars of any of customer/s match the particulars of designated individuals/entities, stock exchanges, depositories and intermediaries shall immediately, not later than 24 hours from the time of finding out such customer, inform full particulars ... to Ministry of Home Affairs,” Sebi said in a statement.

Last month, in an effort to check money laundering and financing of terrorism, Sebi had asked the intermediaries to ensure that none of their client figures among those against whom sanctions are imposed by UN Security Council Committee.
Further, the regulator said in case any customers details matches the particulars of designated individuals or entities in the list “beyond doubt”, the securities intermediaries “would prevent designated persons from conducting financial transactions”, under intimation to Ministry of Home Affairs.

According to laid rules, on receipt of particulars, the Home Ministry would initiate a verification by the state police and the central agencies. The verification would be completed within 5 days.

On confirmation that the properties are owned by or held for the benefit of the designated individuals/entities, an order to freeze the assets would be issued within 24 hours without prior notice to the entity concerned, the Sebi said.

In case the person is not a designated person, it said he would have to apply for unfreezing of funds with requisite evidence on which Home Ministry would initiate a verification and pass an order for unfreezing within 15 working days.