In order to effectively monitor suspicious transactions, India's Financial Intelligence Unit (FIU) has released a new set of "alert indicators" for various financial channels.
In accordance with the terms of the Prevention of Money Laundering Act (PMLA), these new guidelines were issued for the 2022–2023 fiscal year and published in a report that PTI was able to access.
Financial institutions and intermediaries must share suspicious transaction reports (STRs) with the Federal Bureau of Investigation (FIU). The FIU then analyzes and shares these reports with investigative and intelligence agencies for action. This is part of the country's anti-money laundering (AML) and combating the financing of terrorism (CFT) regime.
The FIU collaborates with regulators and reporting entities to understand new risks and implement measures to reduce them.
FIU has changed how it gets information about securities market transactions in the capital markets sector due to new guidelines.
"Alert indicators" will cover "emerging risks" in market infrastructure institutions (MIIs), such as order spoofing, manipulative trade practices, and stockbrokers misusing client funds. This is crucial for strengthening the AML/CFT architecture due to rising trading volumes.
The report highlighted the need for improvement in the quality of suspicious transaction reports from MIIs to the FIU. This improvement is expected to help create useful intelligence for government organizations.
The agencies decided to revise the guidelines and change the system so that only stockbrokers and depository participants report STRs to FIU. New alert indicators have been issued. These agencies included the market regulator SEBI, the FIU, stock exchanges, and depositories.
