Sebi seeks online submission of STRs by market entities to FIU

The reports will help the enforcement agencies check manipulative practices, frauds and scams, among others

PTI | October 3, 2012



Market regulator Sebi has asked all the entities under its jurisdiction to submit suspicious transaction reports (STRs) electronically through a new direct online gateway to the Financial Intelligence Unit (FIU).

FIU-India is the country's nodal agency for receiving, processing, analysing and disseminating information relating to suspect financial transactions to various enforcement agencies and their overseas counterparts.

Market regulator Sebi has communicated to the country's two leading stock exchanges -- BSE and NSE -- that FIU-India has developed this new reporting gateway for submission of STRs and Cash Transaction Reports (CTRs).

The bourses have accordingly directed all the market entities to initiate submission of these reports on the new FIU gateway and ensure compliance to the Sebi directive.

These reports help the enforcement agencies check manipulative practices, frauds and scams, among others.

Currently, various market and financial sector entities, including brokerage firms and banks, are allowed to submit various reports, including STRs, CTRs and Counterfeit Currency Reports (CCRs) electronically through CDs or manually in physical paper formats.

However, FIU-India has developed a new FINnet Gateway for direct uploading of these reports by the reporting entities.

FIU-India in August had told Sebi (Securities and Exchange Board of India), Reserve Bank of India (RBI) and other agencies about the new system.

It had asked them to advise reporting entities to initiate submission of reports through 'test mode' of the FINnet Gateway to check the new system.

The reporting entities were asked to continue with the existing practice of submission of reports in CD form till the 'go-live' date -- provisionally set at October 1 at that time.

However, the bourses in their latest directive have asked the market entities to initiate submission of reports on the FINnet Gateway under the 'Test Mode' for now.

The information required to be furnished to FIU include all cash transactions worth over Rs 10 lakh, all suspicious transactions whether or not made in cash and all series of cash transactions below Rs 10 lakh but connected to each other and having taken place within a month.

Besides, all transactions over Rs 10 lakh involving receipts by non-profit organisations and the transactions where counterfeit currency or forged security or documents have been used are also required to be reported to FIU.

The suspicions transactions are those that give rise to a reasonable ground of suspicion of involvement of proceeds of an offence, appear to be made in circumstances of unusual or unjustified complexity, appear to have no economic rationale or bonafide purpose and those giving rise to suspicion about financing of the terrorism-related activities.

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