Know Your Customer / Anti-Money Laundering / Combating the Financing of Terrorism (KYC/AML/CFT) – Guidelines issued by PFMS vide circular dated 23.01.2023
पेंशन निधि विनियामक एवं विकास प्राधिकरण
PENSION FUND REGULATORY AND DEVELOPMENT AUTHORITY
Circular no.: PFRDA/2023/05/REG-POP/02 Date: 23 January, 2023
All Point of Presence (POPs)
Subject: Guidelines on Know Your Customer / Anti-Money Laundering / Combating the Financing of Terrorism (KYC/AML/CFT)
1. Entities registered as Point of Presence (PoP) are required to comply with the
requirements of Prevention of Money Laundering Act, 2002 as per Regulation 15 of the PFRDA (Point of Presence) Regulations, 2018.
2. These guidelines are issued under the provisions of PML Act and Rules.
3. These guidelines will be effective from the date of its issuance. Provisions for Knowing existing subscribers (Para 8.2.2) pertaining to re-KYC will be effective from 01st April 2023.
Digitally signed by SUMEET KAUR
Sumeet Kaur Kapoor
Guidelines on Know Your Customer / Anti-Money Laundering / Combating the Financing of Terrorism (KYC/AML/CFT)
1. Short Title
These guidelines shall be called as Guidelines on Know Your Customer / Anti- Money Laundering / Combating the Financing of Terrorism (KYC/AML/CFT). These guidelines are issued by exercising the power conferred under Section 14(1) of Pension Fund Regulatory and Development Authority Act, 2013(PFRDA Act) and provisions 4,5,7,9, 9A & 10 of the PML Rules.
2.1 NPS has an unbundled Architecture, where each function is performed by different intermediaries appointed by the PFRDA viz. Pension Funds, Custodian, Central Recordkeeping Agency (CRA), National Pension System Trust, Trustee Bank, Points of Presence (PoP) and Annuity Service Providers (ASPs). Wherein, the role of CRA is recordkeeping, administration and customer service functions for all the subscribers of the NPS including issuance of unique Permanent Retirement Account Number (PRAN) to each subscriber, maintaining a database of all PRANs issued and recording transactions relating to each subscriber’s PRAN.
2.2 Money Laundering is a process or activity through which proceeds of crime (i.e., illegally acquired money) are converted in the financial systems (by means of undertaking transactions) so that it appears to be legally acquired. Section 3 of PML Act specifies the Offence of Money Laundering.
2.3 In terms of the provisions of Prevention of Money Laundering Act, 2002 (PML Act) and the Prevention of Money Laundering (Maintenance of records) Rules, 2005 (PML Rules), reporting entities (RE) are required to follow Customer Identification Procedures (CIP) while undertaking a transaction at the time of establishing an account-based relationship / client-based relationship and monitor their transactions on an on-going basis.
2.4 The obligation to establish an anti-money laundering mechanism and formulate and implement a Client Due Diligence (CDD) Programme applies to RE as per provisions of clause (ii) and (iii) sub rule (14) of Rule 9 of the PML Rules. RE shall have the responsibility for guarding against NPS, NPS Lite, APY or any other pension scheme regulated / administered by PFRDA being used to launder unlawfully derived funds or to finance terrorist acts.
2.5 All REs shall take steps to implement provisions of the PML Act and the PML Rules, as amended from time to time, including operational instructions issued through circulars/guidelines/ directions in pursuance of such amendment(s).