agencies
Foreign portfolio investors (FPIs) are likely to seek from the finance ministry a six-month extension of the date for complying with the amendments to the Prevention of Money-Laundering Act (PMLA), citing implementation challenges.
Sources said FPIs, through their custodians, were planning to approach the ministry, highlighting key concerns and seeking more clarification.
The ministry, through a notification on March 7, lowered the threshold for reporting ultimate beneficial ownership (UBO) for non-profit organisations and politically exposed persons to 10 per cent from 25 per cent.
Earlier, the 10 per cent threshold was applicable only to entities in high-risk jurisdictions.
Further, FPIs have to disclose the names of senior management officials (SMOs) within 30 days.
The government has asked the entities to also reveal the names of the partners and addresses of the registered offices and the principal places of their businesses (if they are different).
The move has stumped overseas funds, which are hesitant to furnish such information.
“Custodians may seek clarity on the timeline they should comply with and whether it (not doing so) will be seen as violation in the interim.
“As the change has already been brought by a notification, the custodians are required to do a lot of work, including rework on the recently on-boarded clients too,” said Suresh Swamy, partner, Price Waterhouse & Co.
