RIYADH: The Capital Market Authority (CMA) confirmed its commitment to ensure the safety of invested money in the capital market and its alignment with the applicable laws in the country.

Several measures are taken as such to ensure that suspicious funds related to money laundering or terrorism financing are not entered into the capital market.

In December 2008, CMA issued Anti-Money Laundering and Counter-Terrorist Financing Rules. Article 1 states that the objectives of these rules are that all authorized, and registered persons must comply fully with the controls and procedures issued by the CMA to ensure that fully apply the Anti-Money Laundering Law issued by royal decree and its implementing regulation, and apply the requirements of the FATF's 40 recommendations in addition to international conventions and Security Council resolutions in this regard.

The article explains that these rules aim to maintain the credibility, integrity and reputation of the capital market and protect the authorized persons and their clients from illegal transactions involving money laundering, terrorist financing or other criminal activity.

CMA states that authorized persons (financial institutions authorized by CMA to conduct securities business) will develop and implement internal policies, procedures and controls to help prevent money laundering and terrorist financing and must communicate these to its employees. The compliance officer must also ensure compliance with the AML/CFT policies, procedures and controls. All of this is part of CMA's efforts to ensure the safety and integrity of the market.

Article 23 of the rules states that the policies, procedures and controls must include, among other things, customer due diligence (CDD) measures, record retention, the detection of unusual and/or suspicious transactions and the obligation to make a suspicious transaction report (STR) to the financial intelligence unit at the Ministry of Interior.

An authorized person must ensure that the money laundering and terrorism financing reporting officer (MLRO) and any of its staff performing compliance function have timely access to all client and transaction records and other relevant information, which they require to discharge their functions.

Based on Article 20, the authorized person must appoint an appropriately senior employee within the authorized person to whom all staff are instructed to promptly refer all complex, huge or unusual transaction or raises doubt and suspicion concerning its nature and purpose, or is related to money laundering, financing of terrorism, terrorist acts, or terrorist organizations, for possible referral to the FIU as an STR.

The MLRO must be a registered person, and have sufficient academic, scientific and practical experience in AML/CFT.

MLRO's duties include the following: Develop, update and implement the authorized person’s system, procedures and controls on AML/CFT; keep pace with developments in AML/CFT laws and regulations, trends, techniques, and update indicators of money laundering or terrorist financing; ensure that the authorized person complies with its policies and procedures; receive directly from staff any reports of suspicious transactions or activity and analyze those reports and then decide whether to file an STR with the FIU.

The officer’s duties also include preparing an annual report to the board of the authorized person stating all actions that have been taken to implement internal policies, procedures, controls and proposals.