SEC to capital market operators: Don’t transact with North Korean, Iranian banks

The Securities and Exchange Commission (SEC) has directed capital market operators to restrict dealings with financial institutions in North Korea and Iran, and increase due diligence on dealings with Myanmar banks over money laundering and terrorism financing risks.

SEC issued the directive in a circular to all capital market regulated entities (CMREs), citing the Financial Action Task Force’s (FATF) identification of jurisdictions posing significant money laundering, terrorism financing and proliferation financing risks.

The circular was published on Friday, but dated June 19.

SEC said the directive was issued under the Investments and Securities Act (ISA) 2025 and its anti-money laundering, countering financing of terrorism and countering proliferation financing (AML/CFT/CPF) rules and regulations.

For North Korea, the commission directed CMREs to terminate correspondent banking relationships with financial institutions incorporated in, owned or controlled by persons or entities in the country.

“Ensure that no subsidiaries, branches, or representative offices of DPRK financial institutions are established or maintained within their operations,” SEC said.

“Restrict or, where appropriate, refuse business relationships and transactions involving DPRK nationals, entities, government bodies, or persons acting on their behalf.”

For Iran, the commission directed operators to refuse to process or facilitate transactions with Iranian financial institutions.

“Refuse to process or facilitate transactions with Iranian financial institutions and decline to establish or maintain subsidiaries, branches, or representative offices of such institutions in Nigeria,” the market regulator added.

SEC further directed operators to refrain from establishing or operating branches, subsidiaries or representative offices in Iran where deficiencies in the country’s AML/CFT/CPF framework could compromise compliance obligations.

For Myanmar, the commission directed CMREs to apply enhanced due diligence measures proportionate to the risks associated with the country.

“Apply enhanced due diligence measures commensurate with the risks associated with Myanmar, including increased frequency, scope, and intensity of transaction monitoring for customers, transactions, and business relationships connected to Myanmar,” SEC said.

This includes increasing the frequency, scope and intensity of transaction monitoring for customers, transactions and business relationships connected to Myanmar.

SEC LISTS 20 JURISDICTIONS UNDER INCREASED MONITORING

The commission drew the attention of capital market operators to jurisdictions currently under FATF increased monitoring.

They are Algeria, Angola, Bolivia, British Virgin Islands, Bulgaria, Cameroon, Côte d’Ivoire, Democratic Republic of the Congo, Haiti, Kenya, Lao PDR, Lebanon, Monaco, Namibia, Nepal, South Sudan, Syria, Venezuela, Vietnam and Yemen.

SEC directed CMREs to apply appropriate risk-based measures to dealings involving the listed jurisdictions.

The commission also told all CMREs that have not subscribed to Nigeria’s Sanctions (NigSac) alerts system to do so immediately.

“Subscription is mandatory to ensure timely access to terrorist financing and proliferation financing designations and to support the effective implementation of Targeted Financial Sanctions (TFS),” the regulator said.

SEC told CMREs to “take note that at all times, any unusual or suspicious transactions shall be promptly reported to the Nigerian Financial Intelligence Unit (NFIU)”.

“This circular takes immediate effect and failure to comply with these directives shall constitute a violation of the Investments and Securities Act, 2025, and the SEC AML/CFT Rules and Regulations,” the regulator said.

The commission said violations would attract appropriate regulatory sanctions, including fines, suspension of operations, or revocation of registration.

SEC to capital market operators: Don’t transact with North Korean, Iranian banks

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