ISLAMABAD: The Securities and Exchange Commission of Pakistan (SECP) has approved the draft Centralised (Know Your Customer) Organization Rules, 2016 to establish the central information database of shareholders.
“The centralised KYC organisation will develop a centralised system for maintaining separate and exclusive database for the KYC information of clients, maintaining accounts with market intermediaries,” the Securities and Exchange Commission of Pakistan said in the statement.
“The duplication of procedures performed at the time of opening accounts with different market intermediaries will also be avoided. The draft rules therefore provide for the licensing and operation of a CKO in Pakistan.”
The government sought public comments on the rules, framed under the Securities Act, 2015, by May 15. Currently, all capital market intermediaries such as securities brokers perform registration/account opening process for their clients separately.
The Securities and Exchange Commission of Pakistan said this process involves collection of supporting documents from the clients, “which not only lead to duplication of efforts and waste of resources but also results in clients having to repeatedly undergo KYC process each time they open an account with an intermediary.”
“This can at times lead to variation in the know your customer information for the same client such as mobile number, email, address, etc. available with different intermediaries,” it said.
“Moreover, the possibility of individual intermediaries not being able to verify the accuracy of KYC information creates problems of authenticating whether the client is operating his or her own account.
The verification of know your customer information is particularly pertinent as an efficient KYC system serves as the backbone of an effective anti-money laundering and counter-terrorism financing regime.”
