To check money laundering through stock markets, top stock exchange BSE has asked its members to report on a monthly basis details of the STRs (Suspicious Transaction Reports) submitted to the government's Financial Intelligence Unit (FIU), PTI has reported.
The members have been asked to provide details of their registration with the FIU, as also the information about the principal officer and the designated directors for the PMLA (Prevention of Money Laundering Act) compliance.
Further, in case of change in the details submitted, members will need to update the relevant fields. BSE has also asked members to report the cumulative number of STRs filed with the FIU as on March 31, 2015.
Thereafter, the members would need to report the number of STRs filed with FIU on a monthly basis. The regulators and the financial intelligence agencies have enhanced their vigil in the recent months on entities trying to misuse the stock market platform for possible laundering of black money and to evade taxes. Nearly 950 entities have already been barred by Sebi for such attempts, while further action is underway against them.
Sebi norms also require all entities under its jurisdiction to submit STRs electronically to the FIU. However, some brokers and other entities were found to be lax.
FIU India is the government agency responsible for receiving, processing and analysing financial transactions and disseminating information relating to suspect transactions to various intelligence and enforcement agencies.
Last year, all market entities were asked to "get themselves registered with FIU India through the FINnet Gateway (FINgate) Portal", which acts as a comprehensive interface between the reporting entities and the FIU.
The brokers need to furnish Cash Transaction reports (CTRs) and Suspicious Transaction Reports (STRs) among others to the FIU through this gateway. These reports help enforcement agencies check the manipulative practices, fraud and scams, among others. The FIU was set up by the government to coordinate and strengthen collection and sharing of financial intelligence through national, regional and global networks to combat money laundering and related crimes.
Earlier, all such reports used to be furnished physically, but the online gateway, which was first rolled out in 2012, has made these processes much simpler and faster. The information required to be furnished to the FIU includes all cash transactions worth over Rs 10 lakh, all suspicious transactions whether or not made in cash and all series of cash transactions below Rs 10 lakh but connected to each other and having taken place within a month.
Besides, all transactions over Rs 10 lakh involving receipts by non-profit organisations and transactions where counterfeit currency or forged security or documents have been used, are also required to be reported to FIU. Suspicious transactions are those that give rise to a reasonable ground for suspicion of involvement of proceeds of an offence, appear to be made in circumstances of unusual or unjustified complexity, appear to have no economic rationale or bonafide purpose and those giving rise to suspicion about financing of terrorism-related activities.