The Government of India, through notifications dated March 7, 2023, and September 4, 2023, amended the Prevention of Money Laundering (Maintenance of Records) Rules, 2005, impacting the beneficial ownership thresholds. Subsequently, Securities and Exchange of Board of India modified para 4.1.2. under Chapter 4 of its Master Circular No. SEBI/HO/AFD/PoD1/P/CIR/2023/130 dated July 31, 2023, specifically for Alternative Investment Funds (AIFs).
The modified para specifies the investor, or its beneficial owner as determined in terms of sub-rule (3) of rule 9 of the Prevention of Money-laundering (Maintenance of Records) Rules, 2005, is not the person(s) mentioned in the Sanctions List notified from time to time by the United Nations Security Council and is not a resident in the country identified in the public statement of Financial Action Task Force as –
(i) A jurisdiction having a strategic Anti-Money Laundering or Combating the Financing of Terrorism deficiencies to which countermeasures apply; or
(ii) A jurisdiction that has not made sufficient progress in addressing the deficiencies or has not committed to an action plan developed with the Financial Action Task Force to address the deficiencies.
If an existing AIF investor doesn't meet the revised conditions, the AIF manager cannot draw down further capital contributions from such investor until compliance is achieved.
This circular shall come into force with immediate effect.