Description

BSE releases updated FATF jurisdiction list requiring trading members to identify clients from specified countries and submit declarations through BEFS portal.

Summary

BSE has released updated FATF (Financial Action Task Force) public statements following the October 2025 plenary, requiring all trading members to screen their client base for individuals/entities from specified high-risk jurisdictions. Trading members must submit mandatory declarations through the BEFS portal, upload signed SEBI templates, and report any clients belonging to flagged countries with appropriate due diligence documentation.

Key Points

  • Trading members must identify clients belonging to FATF-flagged jurisdictions released by SEBI
  • Mandatory declaration submission through BEFS portal (https://befs.bseindia.com/login.aspx)
  • SEBI template upload is compulsory for all members, regardless of whether they have clients in flagged countries
  • If clients from flagged countries exist, a CSV file with Unique Client Code and Client Name must be uploaded
  • Template must be on company letterhead, signed/stamped by MD/Compliance Officer, or digitally signed
  • Proper alert mechanisms must be in place to monitor business relationships and transactions with flagged jurisdictions
  • Acknowledgement email sent upon successful submission

Regulatory Changes

SEBI continues its ongoing process of releasing jurisdictions requiring enhanced due diligence based on FATF public statements. This circular provides the procedural framework for trading members to comply with FATF recommendations following the October 2025 plenary meeting.

Compliance Requirements

For All Trading Members:

  1. Login to BEFS portal using credentials
  2. Navigate to “FATF Declaration – Declaration Form” in left pane
  3. Select the applicable period and save
  4. Screen existing client base against SEBI-specified countries
  5. Download and complete SEBI template (provided in Word format)
  6. Convert template to PDF format
  7. Print on company letterhead and obtain signature/stamp from MD/Compliance Officer OR digitally sign the PDF
  8. Upload signed PDF template (mandatory for all members)
  9. Click confirmation tab and submit

Additional Requirements if Clients from Flagged Countries Exist:

  • Prepare CSV file containing Unique Client Code and Client Name for all affected clients
  • Upload CSV file along with SEBI template
  • Conduct appropriate enhanced due diligence on these clients
  • Implement alert mechanisms to monitor transactions with flagged jurisdictions

Authorized Signatories:

  • Managing Director
  • Compliance Officer
  • Authorized signatory of the organization (for digital signatures)

Important Dates

  • FATF Plenary: October 2025
  • Circular Release Date: November 17, 2025
  • Submission Period: Must be selected in BEFS portal (specific deadline not mentioned in circular)

Impact Assessment

Operational Impact: High - All trading members must complete the screening and declaration process, requiring resources for client database screening, template preparation, and submission.

Compliance Impact: High - Mandatory submission requirement with no exceptions; failure to comply may result in regulatory action.

Resource Impact: Medium - Requires coordination between compliance teams, IT systems for client screening, and management for approvals and signatures.

Ongoing Monitoring: Trading members must establish continuous monitoring systems to identify new clients or transactions involving FATF-flagged jurisdictions, as SEBI releases updated lists periodically.

Risk Mitigation: Enhanced due diligence requirements help trading members and the market ecosystem comply with international AML/CFT standards and reduce exposure to money laundering and terrorism financing risks.

Impact Justification

Mandatory compliance requirement for all trading members to identify and report clients from FATF-flagged jurisdictions, with compulsory template submission irrespective of client presence