IFSCA Issues AML, CFT and KYC Guidelines FAQs

The International Financial Services Centres Authority (IFSCA) has issued a set of Frequently Asked Questions (FAQs) on the Anti Money Laundering, Counter-Terrorist Financing and Know Your Customer (KYC) Guidelines, 2022. The FAQs are intended to provide regulatory clarity and facilitate consistent implementation of the Guidelines by regulated entities operating in IFSCs.

1. Applicability of the Guidelines

The FAQs reiterate that the Anti Money Laundering, Counter-Terrorist Financing and KYC Guidelines, 2022 apply to every Regulated Entity (RE) that is:

• Licensed by IFSCA;
• Recognised by IFSCA; or
• Registered with IFSCA.

Accordingly, all regulated entities operating within the IFSC framework are required to comply with the Guidelines.

2. Clarifications on Appointment of Designated Director and Principal Officer

The FAQs provide guidance regarding the appointment and responsibilities of:

• Designated Director; and
• Principal Officer.

These officials play a key role in ensuring compliance with anti-money laundering and counter-terrorist financing requirements and in coordinating with regulatory and enforcement authorities.

3. Guidance on Customer Due Diligence (CDD)

The FAQs clarify various aspects relating to Customer Due Diligence (CDD) requirements, including identification and verification procedures applicable to customers and beneficial owners.

The guidance is intended to assist regulated entities in implementing risk-based customer onboarding and monitoring processes.

4. Clarification on Video-Based Customer Identification Process (V-CIP)

The FAQs also address issues relating to the Video-Based Customer Identification Process (V-CIP).

The clarifications provide guidance on the use of technology-enabled customer identification processes while ensuring compliance with KYC and AML requirements.

5. Guidance for Fund Management Entities (FMEs)

Specific clarifications have been issued for Fund Management Entities (FMEs) operating within IFSCs.

The FAQs address compliance obligations and practical issues relevant to FMEs under the AML, CTF and KYC framework.

6. Measures to Counter Terrorist Financing

The FAQs also provide guidance on measures relating to Counter-Terrorist Financing (CTF), including compliance with applicable screening, monitoring and reporting requirements.

These clarifications are aimed at strengthening the implementation of safeguards against terrorist financing activities.

7. Objective of the FAQs

The FAQs seek to:

• Provide regulatory clarity on the AML, CTF and KYC Guidelines;
• Promote uniform interpretation and implementation of the Guidelines;
• Assist regulated entities in meeting compliance obligations;
• Address practical issues faced by regulated entities; and
• Strengthen the anti-money laundering and counter-terrorist financing framework within IFSCs.

8. Key Takeaway

IFSCA has issued FAQs on the Anti Money Laundering, Counter-Terrorist Financing and KYC Guidelines, 2022 to provide clarity on key compliance requirements. The FAQs cover areas such as the appointment of Designated Directors and Principal Officers, Customer Due Diligence (CDD), Video-Based Customer Identification Process (V-CIP), compliance obligations of Fund Management Entities (FMEs), and measures to combat terrorist financing.

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