FMC brings new guidelines on due diligence

New rules allow exchanges to access Central KYC registry

Forward Markets Commission (FMC) today came out with new guidelines to enable commodity exchanges and their members to use the Central KYC Registry (CKYCR), a unified electronic data base that helps faster verification of clients and investors.      

The Commission has come out guidelines for Commodity Market Intermediaries (CMIs) on customer due diligence, third party verification and maintenance of record of transactions.

The Commission has devised the the guidelines, In pursuance of Prevention of Money Laundering (Maintenance of Records) Amendment Rules, to facilitate availing of the services of CKYCR by the CMIs.      

For customer due diligence, FMC  said, every reporting entity at the time of commencement of an account based relationship should identify its clients, their identity, obtain information on the purpose and intended nature of the business relationship.

It said the CMI may rely on 'third party' verification of client or customer information, subject to the certain conditions.

Every CMI, FMC  said, should maintain record of all transactions with its client in "soft copy" as well as in "hard copy".

"It is instructed that such information may be maintained for upto 10 years from the cessation of the concerned client/customer’s association with the intermediary," the Commission added.

The Commission has already adopted a Common KYC information template for individuals/non-individuals in the commodity market on the lines of the Sebi KYC template.