Parliamentary committee suggests measures to check menace
MONEY LAUNDERING THROUGH STOCK MARKET
New Delhi, May 9: A Parliamentary Standing Committee on Finance has said that despite rampant money laundering taking place through stock market, no proper measures have been incorporated in the relevant laws to check the menace.
The committee has suggested “appropriate” provisions in the Prevention of Money Laundering (Amendment) Bill, 2011 to check this menace.
In its report tabled in Parliament on Wednesday, the committee headed by former Finance Minister Yashwant Sinha “found it strange that though Participatory Notes issued by FIIs are being regulated by the SEBI, the other investments being made in the stock market including foreign currency flows both by individuals and institutional investors do not come under the SEBI’s purview.”
The committee has recommended that SEBI should set up a “coordination mechanism” with Reserve Bank of India to properly monitor the fund flow into the domestic stock/securities market.
“Suitable amendments may therefore be made in the Bill to monitor and curb possible money laundering taking place through stock and securities markets,” the report suggests.
On the issue of ‘trade-based money laundering’, the committee on enquiry found that no separate data has been made by the departments concerned about the registration of cases related to trade-based money laundering and the manner in which the proposed legislation will deal with it.
The committee has recommended that such cases should be separately. “The departments need to maintain a comprehensive data-base in this regard,” it said.
The Government on its part had admitted before the committee that trade money laundering has not been distinguished from other forms of money laundering as a distinct offence. On this basis, it expressed inability to provide separate data showing the number of cases.
Observing that the anti-money laundering law in its present form does not impose any obligation on the clients, it has recommended that “appropriate parameters” clearly defining the nature and scope of “suspicious transactions” and its “beneficial ownership” be put in place.
On the issue of fixing onus of proof to prove that the property in question is not out of proceeds of money-laundering crime, the Committee said that parameters should be fixed prescribing onus of proof.
Lastupdate on : Wed, 9 May 2012 21:30:00 Makkah time
Lastupdate on : Wed, 9 May 2012 18:30:00 GMT
Lastupdate on : Thu, 10 May 2012 00:00:00 IST
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