SEBI proposes mandatory AML/CFT certification for principal officers of market intermediaries
The proposal is aimed at ensuring that principal officers possess adequate expertise to identify suspicious transactions, assess money-laundering risks and comply with reporting obligations under the AML/CFT framework
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Published - November 06, 2026 06:05 pm IST - New Delhi
Under SEBI’s proposed framework, these officials would be required to possess adequate knowledge of the Prevention of Money Laundering Act, customer due diligence, beneficial ownership requirements, risk-based classification of clients, enhanced due diligence and transaction monitoring systems.
File | Photo Credit: Getty Images
Markets regulator Securities and Exchange Board of India (SEBI) on Friday (November 6, 2026) proposed making Anti-Money Laundering and Countering the Financing of Terrorism (AML/CFT) certification mandatory for principal officers of all registered intermediaries to strengthen their knowledge, competence and professional capacity in implementing regulatory norms.
The proposal is aimed at ensuring that principal officers possess adequate expertise to identify suspicious transactions, assess money-laundering risks and comply with reporting obligations under the AML/CFT framework.
"Considering the central role performed by Principal Officers in ensuring compliance with AML/CFT framework, it is proposed that AML/CFT related certification may be introduced for the Principal Officers," SEBI said in its consultation paper.
Currently, SEBI's regulatory framework mandates the appointment of a principal officer at the management level by registered intermediaries and there is no specific AML/CFT certification requirement for such officials.
As a result, the level of knowledge and expertise relating to anti-money laundering and counter-terror financing measures may vary across intermediaries, the regulator noted.
Principal officers are responsible for identifying and assessing potentially suspicious transactions, maintaining records and ensuring timely reporting of such transactions to the Financial Intelligence Unit-India.
Under the proposed framework, these officials would be required to possess adequate knowledge of the Prevention of Money Laundering Act, customer due diligence, beneficial ownership requirements, risk-based classification of clients, enhanced due diligence and transaction monitoring systems.
The certification would also cover targeted financial sanctions, reporting obligations, record maintenance and emerging risks arising from new products and technologies.
The regulator has also proposed a timeline of six months for compliance with the certification requirement for both existing and newly appointed principal officers.
SEBI said it has collaborated with the National Institute of Securities Markets (NISM) to develop a certification examination covering AML/CFT provisions in the securities market.
NISM launched the Series-XXIV AML/CFT certification examination in February 2025.
The regulator has sought public comments on the proposal till November 27.
business (general) / economy, business and finance / financial markets
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