AML Principal Officer: Appointment and Role in IFSCA regulated entity

AML Principal Officer: Appointment and Role in IFSCA regulated entity

In compliance with the IFSCA (AML, CFT, and KYC) Guidelines, 2022, the regulated entities must appoint a qualified and competent AML principal Officer to manage the overall AML compliance function in the IFSCA-regulated entity.

The person designated as the AML Principal Officer must be a management-level employee of the entity, having adequate seniority to make AML-related decisions. Further, the AML Principal Officer must have access to the appropriate resources and data necessary to drive the entity’s AML framework. The officer must maintain independence and avoid conflict of interest between AML compliance and the business.

An AML Principal Officer is entrusted with various AML-related responsibilities under IFSCA Guidelines, which include the following:

  • Designing the robust AML framework, adopting a risk-based approach, and overseeing its effective implementation across the organization
  • Ensuring performance of ongoing monitoring of business relations to identify the potential risk indicators and safeguard the business
  • Promoting AML culture in the organization, ensuring adequate AML training program is in place, updating the team and senior management on the AML-related regulatory amendments impacting the business
  • Promptly addressing the observed ML/FT suspicions and reporting the same with FIU-IND
  • Periodically reviewing the implemented AML compliance program to maintain its quality and relevance to the assessed business risks and the applicable AML/CFT regulations
  • Timely updating the senior management about the observed AML/CFT non-compliance instances, emerging ML/FT risks, and actions taken by the Principal Officer

Only with the AML Principal Officer’s effective oversight the AML program can be implemented in its true spirit in the IFSCA-regulated entities, ensuring compliance with laws and protection against financial crime risks.

Here is a visual chart discussing the key considerations to be noted when appointing an AML Principal Officer and such an officer’s key roles and responsibilities.

Let AML India help you select the right person to serve as AML Principal Officer, taking the business one step ahead with the highest quality compliance with AML regulatory landscape.

We are committed to assisting proper enforcement of AML and CFT regulations to regulated entities in India by designing a personalised AML framework – policies, internal controls, and procedures – and ensuring effective implementation of the same.

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