As many as 35 stock brokers have been probed by capital market regulator Sebi for possible lapses in controls related to money laundering and terror financing, and further action may be taken soon in these cases.
The inspections by the Securities and Exchange Board of India follow actions taken by stock exchanges and depositories against more than 300 market entities for violations and discrepancies related to Anti-Money Laundering and Combating Financing of Terrorism(AML and CFT) regulations in the 2011-12 fiscal.
The brokers have been probed for their compliance to Know Your Client rules, their due diligence procedures and their compliance to various AML and CFT related regulations, while actions have been taken by exchanges and depositories after similar inspections of various market entities.
In its latest annual report for 2011-12, Sebi said that it conducted “35 specific purpose inspections of stock brokers to check their KYC process, the extent of due-diligence and compliance level with current regulatory and statutory framework in this regard.
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Link to SEBI Annual report 2011-2012: click here