'Know Your Client' (KYC) criteria is set to be made mandatory soon for all share market investors as it is done in the case of bank clients to restrict easy entry of tainted money into the capital market, highly placed sources in the Ministry of Finance(MoF) and Bangladesh Bank(BB) said Saturday.

A clear instruction to this effect will be issued soon by the Financial Intelligence Unit (FIU) of the BB as the draft of the guideline has recently been okayed by Securities and Exchange Commission (SEC), they said.

The government has undertaken the initiative to introduce the 'KYC' to meet the requirements of global anti-money laundering watchdogs -- Financial Action Task Force (FATF) and Asia Pacific Group (APG) on money laundering, a senior finance official said.

Stock brokers, stock dealers and other capital market intermediaries, under the proposed guidelines, will have to report to the FIU of BB regularly in the event of suspicious transactions in the share market, a BB official said.

"We have to trace suspicious transactions in the share market by introducing reporting system for capital market intermediaries to brighten our image globally," Abu Hena Mohd. Razee Hassan, Deputy Governor, Bangladesh Bank, told the FE on Saturday.

"The country cannot afford to downgrade its status internationally due to loopholes in the enforcement of provisions in the current Anti-money Laundering act," he added.

The flow of investment from both local and foreign sources into the capital market might increase once the guideline is issued, he expressed the hope.

It is now largely believed that local share market is a safe haven for money earned through corruption, bribery and tax evasion. No reporting system or 'KYC' is now mandatory either for individual or institutional investors or brokerage firms.

Besides, the government is actively considering amending the current Anti-terrorism Act to declare a terrorist of any country of the world as a terrorist of Bangladesh and make the local laws on anti-terrorism equally applicable to foreign terrorists.

The FATF and the APG, especially the US, have long been pressing the government of Bangladesh for keeping a provision to this effect in the Anti-terrorism Act, 2012.

News: The Daily Financial Express/Bangladesh/18-Nov-12