Watch out for money laundering through stock market: CSE MD

Stock market intermediaries should always practice good business ethics to prevent money laundering as criminals target this market to make it a tool, said acting managing director of Chittagong Stock Exchange (CSE) Golam Farooq.

“Money laundering is generally associated only with banks but in reality, money is laundered through both banks and non-banking institutions including financial institutions, and stock market intermediaries,” he said while speaking at a day-long training workshop yesterday at the CSE’s head office in Chittagong.

So, the first thing that the authorities should take into consideration is ‘KYC’, or ‘know your client’, he added.

The workshop, titled “Anti-Money Laundering and Countering Terrorist Financing”, was jointly organised by Bangladesh Securities and Exchange Commission (BSEC) and Chittagong Stock Exchange PLC (CSC).

BSEC Commissioner Dr Rumana Islam, as the chief guest on the occasion, gave her presentation at the workshop.

She said the issue of money laundering through the capital market should be well monitored. The officials have to be aware of any kind of unusual transactions.

“According to Bangladesh Securities and Exchange Ordinance-1969 and Bangladesh Securities and Exchange Act-1993, stock market crimes are market manipulation and insider trading. Apart from these two main offences, there are many minor offences that are being committed,” she said.

Any suspicious transaction are not money laundering. If any transaction falls under the definition of money laundering, it can be tried under the law, she added.

“If any transaction that looks suspicious, be it a large number of shares suddenly changing hands at a normal price, or regular transactions between a few, or transactions without any transparent source, take immediate action. Also be careful when dealing with new clients,” she told the training programme.