YSX, securities firms asked to beef up anti-money laundering compliance

The Yangon Stock Exchange (YSX) and six securities companies were requested by the regulator to beef up their compliance and disclosure in line with its anti-money laundering regulations.

The Securities and Exchange Commission (SECM), in a May 18 announcement, identified “insufficient information collection and reporting procedures” for both the bourse and the firms in following the 2016 anti-money laundering and counter-terrorism financing instruction, after a recent official inspection.

The regulator conducted the first inspection on the bourse and the third inspection on six securities companies between August 2019 and January 2020.

The YSX also needs to strengthen its internal control system, such as setting up an audit committee, and expand the number of staff, according to the announcement.

Securities companies should improve the collection of documents from individual and corporate clients when opening securities accounts, and address the lack of customer and transaction information, which is required by the 2016 Securities Companies Regulations, it added.

“The Yangon Stock Exchange and securities companies are following the instruction of anti-money laundering and counter-terrorism financing. They are doing it but they need to do more to meet the international standards. We are making a push so they will speed things up,’’ said U Htay Chun, a Securities and Exchange Commission member.

The European Commission this month added Myanmar to its list of states that pose high risks to the bloc’s financial system because of anti-money laundering and terrorism financing shortfalls. But Myanmar will only be subject to the regulations from October 1 onwards because of the COVID-19 pandemic.

The new designation follows the decision by Paris-based Financial Action Task Force (FATF) in February to place Myanmar on a list of states perceived as prone to money laundering and terror financing.

Both listings have added pressure on Myanmar authorities to tackle the weaknesses identified by FATF and step up its anti-money laundering implementation, analysts say.

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Source : Myanmar Times

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