Date: 2021-03-25Category: Not ApplicableState: Union GovernmentCountry: India
Combating Financing of Terrorism (CFT) under Unlawful Activities (Prevention) Act, 1967 – Directions to Stock Exchanges, Depositories and all registered intermediaries
**Summary:**
This circular, reference number SEBI/HO/MIRSD/DOP/CIR/P/2021/36, issued by the Securities and Exchange Board of India (SEBI) on March 25, 2021, addresses combating the financing of terrorism (CFT) under the Unlawful Activities (Prevention) Act (UAPA), 1967. It is directed to all intermediaries registered with SEBI under Section 12 of the Securities and Exchange Board of India Act, 1992, through stock exchanges for stock brokers, depositories for depository participants, and the Association of Mutual Funds in India (AMFI) for asset management companies.
The circular's purpose is to ensure strict compliance with a revised procedure outlined by the Government of India (GOI) in an order dated February 02, 2021 (Annexure 1), which supersedes previous orders and guidelines on the implementation of Section 51A of the UAPA, 1967. This section pertains to the prevention of, and coping with, terrorist activities. The GOI's revised procedure aims for expeditious and effective implementation of Section 51A.
This circular follows previous SEBI circulars on the same subject, including ISDA/ML/CIR/2/2009 dated October 23, 2009, SEBI/HO/MIRSD/DOS3/CIR/P/2018/104 dated July 04, 2018, and SEBI/HO/MIRSD/DOP/CIR/P/2019/69 dated May 28, 2019, and SEBI/HO/MIRSD/DOP/CIR/P/2019/113 dated October 15, 2019 which were issued in response to earlier GOI orders. The issuance of this circular is based on the powers conferred under Section 11(1) of the Securities and Exchange Board of India Act, 1992, to protect investor interests, promote market development, and regulate securities markets.
Narendra Rawat, General Manager, Market Intermediaries Regulation and Supervision Department, is the point of contact for this circular.
Key Entities Referenced
Securities and Exchange Board of India SEBI: Regulatory body for securities markets in India, responsible for issuing the circular.
Securities and Exchange Board of India Act, 1992: The act under which SEBI is established and derives its powers.
Unlawful Activities Prevention Act, 1967 UAPA: Indian law aimed at preventing unlawful activities, particularly related to terrorism. The circular addresses combating the financing of terrorism under this act.
Prevention of Money Laundering Act, 2002: Indian law to prevent money laundering and to provide for confiscation of property derived from money laundering.
Government of India GOI: The governing body of India, which issued orders related to the implementation of Section 51A of the UAPA.
Section 51A of the Unlawful Activities Prevention Act, 1967: Specific section of the UAPA that details procedures for preventing and coping with terrorist activities.
Association of Mutual Funds in India AMFI: An association of all the Asset Management Companies (AMC) in India.
Counter Terrorism and Counter Radicalization CTCR Division: A division of the Ministry of Home Affairs responsible for countering terror financing.
CIRCULAR
SEBI/HO/MIRSD/DOP/CIR/P/2021/36 March 25, 2021
To,
All Intermediaries Registered with SEBI under Section 12 of the
Securities and Exchange Board of India Act, 1992
(Through the Stock Exchanges for Stock Brokers, Depositories for
Depository Participants and Association of Mutual funds in India (AMFI)
for Asset Management Companies)
Dear Sir/Madam,
Subject: Combating Financing of Terrorism (CFT) under Unlawful Activities
(Prevention) Act, 1967 – Directions to Stock Exchanges, Depositories and all
registered intermediaries
1. The Government of India (GOI) had issued an Order dated August 27, 2009
detailing the procedure for implementation of Section 51A of the Unlawful Activities
(Prevention) Act, 1967 (UAPA), relating to the purpose of prevention of, and for
coping with terrorist activities. Accordingly, SEBI had issued circular ISD/AML/CIR-
2/2009 dated October 23, 2009 on “Combating Financing of Terrorism (CFT) under
Unlawful Activities (Prevention) Act, 1967” and subsequently master circular
SEBI/HO/MIRSD/DOS3/CIR/P/2018/104 dated July 04, 2018 on “Guidelines on
Anti-Money Laundering (AML) Standards and Combating the Financing of
Terrorism (CFT) / Obligations of Securities Market Intermediaries under the
Prevention of Money Laundering Act, 2002 and Rules framed there under”.
2. In view of the reorganization of Divisions in the Ministry of Home Affairs and
allocation of work relating to countering of terror financing to the Counter Terrorism
and Counter Radicalization (CTCR) Division, GOI has modified the earlier order
dated August 27, 2009 by the order dated March 14, 2019. Accordingly, SEBI had
issued circular SEBI/HO/MIRSD/DOP/CIR/P/2019/69 dated May 28, 2019 on
“Combating Financing of Terrorism (CFT) under Unlawful Activities (Prevention)
Page 1 of 2Act, 1967” and subsequently master circular
SEBI/HO/MIRSD/DOP/CIR/P/2019/113 dated October 15, 2019 on “Guidelines on
Anti-Money Laundering (AML) Standards and Combating the Financing of
Terrorism (CFT) / Obligations of Securities Market Intermediaries under the
Prevention of Money Laundering Act, 2002 and Rules framed there under”.
3. In order to ensure expeditious and effective implementation of the provisions of
Section 51A, GOI has outlined a revised procedure through an order dated
February 02, 2021 (Annexure 1) superseding the earlier orders and guidelines
given on the subject.
4. The enclosed order dated February 02, 2021 issued by GOI in relation to
implementation of Section 51A of the UAPA, 1967 is brought to notice for strict
compliance.
5. This circular is issued in exercise of powers conferred under Section 11(1) of the
Securities and Exchange Board of India Act, 1992, to protect the interests of
investors in securities and to promote the development of, and to regulate the
securities markets.
Yours faithfully,
Narendra Rawat
General Manager
Market Intermediaries Regulation and Supervision Department
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