Common anti-money laundering platform launched for PMS firms: How it will work

KFin Technologies and the Association of Portfolio Managers in India (APMI) have launched a common anti-money laundering (AML) compliance platform for portfolio management services (PMS) firms, as the industry looks to strengthen ongoing monitoring beyond checks conducted at the time of client onboarding.

The platform, called InPro, was launched by SEBI Chairman Tuhin Kanta Pandey at APMI’s third annual conference in Mumbai on October 1.

APMI has adopted the platform for its members, allowing PMS firms to use a common infrastructure for AML screening, monitoring and compliance-related case management.

AML checks can involve screening investor profiles against sanctions lists, regulatory watchlists, politically exposed person (PEP) databases, Indian debarment lists and adverse media sources. The platform is designed to allow such screening both during onboarding and when customer information or risk indicators change.

The move comes as AML compliance involves monitoring changes in customer risk profiles after onboarding. For instance, a new sanctions listing, a change in customer information or a new PEP connection could create a fresh risk signal during the customer relationship.

InPro brings screening and ongoing monitoring together with a Maker-Checker workflow, under which potential alerts can be reviewed, escalated and resolved by compliance teams. It also maintains records of alerts, reviews and decisions, which can be used for internal and regulatory audits.

For PMS firms, the industry-wide model could also reduce the need for each firm to independently build and maintain its own AML technology infrastructure.

This may be particularly relevant for smaller and mid-sized portfolio managers, which have the same regulatory AML and countering the financing of terrorism (CFT) obligations as larger PMS firms but may have fewer resources to develop such systems in-house.

Sreekanth Nadella, MD and CEO, KFin Technologies, said AML monitoring needs to extend beyond point-in-time checks as investor profiles and risk indicators can change during the customer lifecycle.

Vikas Khemani, Chairman, APMI, said the common platform is intended to make technology-enabled AML capabilities more accessible to portfolio managers across the industry.

The initiative therefore combines a common technology infrastructure with standardised workflows for screening, reviewing and documenting AML alerts across participating PMS firms.