SECP Suggests AML Amendments to Simplify Digital Account Opening

The Securities and Exchange Commission of Pakistan (SECP) has proposed important amendments to the Anti-Money Laundering and Counter Financing of Terrorism (AML/CFT) Regulations 2020. These changes aim to strengthen the financial security system while also making it easier for investors to open digital accounts in Pakistan. The initiative reflects a growing effort to balance convenience with safety in the country’s financial sector.

One of the key proposals is to allow verification of bank account details through the “Raast” system using IBAN (International Bank Account Number). This step is significant because it introduces a faster and more reliable method for confirming an investor’s identity. By recognizing IBAN verification through Raast as valid proof, the process of opening accounts digitally becomes simpler and more efficient. It reduces paperwork and minimizes delays that investors often face.

SECP Suggests AML Amendments to Simplify Digital Account Opening

Another important change is the requirement that all transactions must be carried out only through verified bank accounts or e-wallets. This measure is designed to ensure transparency and reduce the chances of fraudulent or suspicious financial activities. By limiting transactions to verified sources, the system becomes more secure and traceable, which is essential in preventing money laundering.

To further improve the security of the identification process, SECP is working with the National Database and Registration Authority to introduce advanced biometric systems. One of the main features of this upgrade is facial recognition technology. This system will help confirm the identity of investors more accurately and reduce the risk of unauthorized access or transactions. With biometric verification, the chances of identity theft or misuse are expected to decrease significantly.

Despite these relaxations in onboarding processes, SECP has made it clear that regulated institutions will still be responsible for conducting proper Know Your Customer (KYC) checks and ongoing transaction monitoring. This ensures that while the process becomes easier for investors, the responsibility of maintaining compliance and vigilance remains strong. Financial institutions will continue to play a key role in detecting and preventing suspicious activities.

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These proposed amendments show a clear effort to modernize Pakistan’s financial system. By introducing digital solutions and simplifying procedures, SECP is encouraging more people to participate in the financial markets. At the same time, the focus on security ensures that these advancements do not compromise the integrity of the system.

The draft of these amendments has been made available on SECP’s website, and the public has been invited to share their feedback within 14 days. This step highlights the importance of transparency and public involvement in regulatory changes. By seeking input from stakeholders and citizens, SECP aims to create a more inclusive and effective regulatory framework.

Overall, the proposed changes are expected to benefit both investors and financial institutions. They will make account opening faster and more convenient while strengthening safeguards against financial crimes. If implemented successfully, these reforms could play a vital role in promoting trust, efficiency, and growth in Pakistan’s financial sector.