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CS Professional · IFSCA - Regulations, Listing and Compliances · Book-keeping, Accounting, Taxation and Financial Crime Compliance Services and TAS

Zenith Compliance Services, a unit in GIFT IFSC, wants to offer anti-money laundering (AML) screening and transaction monitoring support to banks operating in the IFSC. Which statement best describes the nature of this activity under the IFSCA framework for financial services in IFSC?

Providing AML screening and transaction monitoring to IFSC banks is a financial crime compliance service. It helps regulated entities meet their AML and CFT obligations, and it is not a banking or insurance activity, so it can be carried on from the IFSC under IFSCA oversight.

  1. AIt is a financial crime compliance service that supports regulated entities in meeting their AML and CFT obligationsCorrect
  2. BIt is a banking activity that needs a banking unit licence from the RBI
  3. CIt is a purely domestic activity that cannot be carried on from an IFSC
  4. DIt is an insurance intermediary activity regulated only by IRDAI

Explanation

Screening and transaction monitoring support help regulated entities meet AML and CFT obligations, so it is a financial crime compliance service. It is not banking, because the unit does not accept deposits or lend. IFSCA permits such services to be provided from IFSC.

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