Anti Money Laundering Professional in Securities Market

Author: Denny B Justin

What if a giant exposure of financial crime, corruption, and wrongdoing happened in today’s world? Have you heard of the Panama Papers leak? According to the United Nations, the estimated amount of money laundered globally in one year is 2 to 5 percent of global GDP or $800 billion to $2 trillion. This is the heart of broking operations management in the securities market, where fortunes are made and lost in the blink of an eye. In 2016, the world was shocked at the Panama Papers leak, a massive data of more than 11.5 million financial and legal records exposed the vast network of offshore shell companies and revealed how individuals, corporations, and public figures across the globe were using these entities to hide wealth, evade taxes, and potentially engage in money laundering activities. This incident shows the importance of Anti Money Laundering Professionals in the securities market.

So, what is AML? What are the responsibilities of an AML Professional?

Anti Money Laundering (AML) refers to a set of legal and regulatory measures, policies, and procedures implemented by financial institutions to detect and prevent the illegal process of concealing the origins of illegally obtained money. Anti Money Laundering detects illegal activities related to money laundering and the financing of terrorism. Money laundering typically involves disguising the source of unlawful funds, making them appear to come from legitimate sources. The AML professional is a master of financial detective work, constantly scanning the vast landscape of securities transactions for any sign of irregularity. The primary responsibility of an AML professional is to evaluate the potential risks associated with clients, products, and geographic locations to identify vulnerabilities within organizations. AML professionals perform thorough consumer due diligence on clients to verify their identities and assess the risk they pose. They monitor systems to track transactions, identify unusual patterns that may indicate money laundering, and investigate any suspicious activity.  AML professionals ensure that firms comply with local and international laws and regulations.

Now, we understand the importance of AML professionals and their responsibilities. You must be wondering how an individual can become the safeguard of the securities market. There are various certification courses available for AML professionals in India and abroad. For example, the National Institute of Securities Markets (NISM) offers a certification course on AML- Certified Anti-Money Laundering Manager (CALM). Such certified courses will help one to build a career in AML. 

Money laundering seriously threatens the nation’s security market and economic situation. AML professionals are indispensable in ensuring that the security market is not used for money laundering. They help their organizations comply with the AML requirements and manage the AML risks efficiently. AML professional who protects the security markets are the gatekeepers who ensure that the securities market remains a safe place for investment by developing and implementing effective policies, procedures, and controls that detect and prevent money laundering activities within the securities industry. National and International authorities have enacted various laws and regulations to prevent money laundering in the security market. For example, in India, the Prevention of Money Laundering Act (PMLA), 2002, along with the rules and regulations prescribed by the Securities and Exchange Board of India (SEBI), sets out the anti-money laundering (AML) framework for the securities market intermediaries such as brokers, depository participants, portfolio managers, mutual funds, etc.

In a world where financial criminals are becoming increasingly sophisticated, AML professionals are the gatekeepers who play a pivotal role in safeguarding the industry from the criminal activities of money launderers and financial criminals. They also enhance the security market’s integrity, transparency, and reputation. AML professionals must have the skills, knowledge, and experience to perform their functions effectively.  They can acquire or enhance these skills and knowledge by pursuing certification courses on AML. The incident of the Panama Papers serves as a reminder of the need for their vigilance and expertise in safeguarding the global financial system.