The Guidelines on the Prevention of Money Laundering, Countering the Financing of Terrorism, Countering Proliferation Financing, and Targeted Financial Sanctions for Reporting Institutions in the Capital Market (the Guidelines) are issued under the following authorities:
(a) For anti-money laundering and countering the financing of terrorism, including Targeted Financial Sanctions relating to Terrorism Financing (TFS-TF), the guidelines are issued pursuant to section 158(1) and section 160A of the Securities Commission Malaysia Act 1993 (SCMA), in conjunction with section 66B, section 66E, and section 83 of the Anti-Money Laundering, Anti-Terrorism Financing and Proceeds of Unlawful Activities Act 2001 (AMLA);
(b) For countering proliferation financing, including Targeted Financial Sanctions relating to Proliferation Financing (TFS-PF), the guidelines are issued pursuant to section 158(1) and section 160A of the SCMA, alongside related legislations (collectively referred to as “TFS-PF related legislations”) which form the legal foundation for domestic implementation of TFS-PF concerning United Nations Security Council Resolutions (UNSCR) on designated countries and persons:
(i) Strategic Trade Act 2010 (Act 708) (STA);
(ii) Strategic Trade (United Nations Security Council Resolutions) Regulations 2010 (P.U. (A) 481/2010);
(iii) Strategic Trade (Restricted End-Users and Prohibited End-Users) Order 2010 (P.U. (A) 484/2010);
(iv) Strategic Trade (Delisting of Prohibited End-Users) Regulations 2014 (P.U. (A) 289/2014); and
(v) Strategic Trade (Unfreezing of Property in relation to Prohibited End-Users) Regulations 2014 (P.U. (A) 290/2014).
1.2 These Guidelines align with the AMLA and the 40 Recommendations of the Financial Action Task Force (FATF).
1.3 The Guidelines outline:
(a) The requirements and obligations for reporting institutions in preventing and combating money laundering, terrorism financing, proliferation financing, and targeted financial sanctions; and
(b) Guidance for reporting institutions to comply with obligations under the AMLA and TFS-PF.
1.4 These Guidelines replace the previous Guidelines on the Implementation of Targeted Financial Sanctions Relating to Proliferation Financing for Capital Markets.
1.5 The Guidelines are supplementary and do not override any other guidelines issued by the Securities Commission Malaysia (SC) or other requirements under securities laws and the AMLA. Reporting institutions must comply with all applicable guidelines and requirements.
1.6 Reporting institutions that are jointly regulated by Bank Negara Malaysia (BNM) and the SC must adhere to both these Guidelines and the Anti-Money Laundering, Countering Financing of Terrorism, Countering Proliferation Financing, and Targeted Financial Sanctions for Financial Institutions (AML/CFT and TFS for FIs) issued by BNM. Where there are discrepancies between guidelines, the more stringent requirements shall prevail.
1.7 Non-compliance with these Guidelines may result in enforcement actions under the AMLA, the Capital Markets and Services Act 2007 (CMSA), or other applicable laws. Penalties can be imposed on reporting institutions and their directors, officers, representatives, and employees for failing to meet any requirements set out in these Guidelines.
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By FCCT Editorial Team
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