The Securities and Exchange Board of India (SEBI) has proposed making anti-money-laundering (AML) and countering the financing of terrorism (CFT) certification mandatory for principal officers of all registered securities-market intermediaries, aiming to strengthen compliance standards and improve the detection of suspicious financial transactions.

Source: ANI via APNA MA TV

In a consultation paper issued on Friday, November 6, the market regulator proposed requiring principal officers to obtain the National Institute of Securities Markets (NISM) Series-XXIV certification on Anti-Money Laundering and Combating the Financing of Terrorism Provisions in Securities Markets.

Under the proposal, existing principal officers would have to complete the certification within six months of the requirement being issued, while newly appointed officers would have six months from the date of their appointment. SEBI has also proposed that officers maintain the validity of the certification throughout their tenure.

At present, SEBI's framework requires every registered intermediary to appoint a principal officer at management level to oversee compliance with the Prevention of Money Laundering Act, 2002, and the Prevention of Money-Laundering (Maintenance of Records) Rules, 2005 — but it prescribes no specific AML/CFT certification for the role, so levels of expertise vary across intermediaries. The proposed requirement seeks to establish a common minimum standard of knowledge and professional competence among the officers responsible for implementing AML/CFT rules.

The principal officer is responsible for reporting suspicious transactions to the Financial Intelligence Unit-India (FIU-IND), recording the reasons for identifying transactions as suspicious and facilitating their reporting to the authorities — the front line of the securities market's defence against laundered money and terror financing.

The certification would cover the Prevention of Money Laundering Act, customer due diligence, beneficial ownership, risk-based client classification, enhanced due diligence, transaction monitoring, reporting obligations, targeted financial sanctions and emerging money-laundering risks arising from new technologies and financial products.

SEBI noted that the certification examination was developed in collaboration with NISM and launched on February 28, 2025, to establish a common knowledge benchmark for employees of securities-market intermediaries. The regulator has invited public comments on the three proposals — the mandatory certification, the designated examination and the six-month compliance timeline — through its website until November 27, 2026.

Source: The Hindu BusinessLine

Sources: ANI report on SEBI's consultation paper, November 6, 2026; The Hindu BusinessLine, November 6, 2026.