SEBI Directs Market Intermediaries to Verify Client Accounts to Eliminate Terror Links as UN Amends ISIL (Da’esh) & Al-Qaida Sanctions List

The Securities and Exchange Board of India (SEBI) has directed all stock exchanges, depositories, KYC Registration Agencies (KRAs), member of the Association of Mutual Funds in India (AMFI) and all registered market intermediaries to verify client accounts to ensure that no individual or entity linked to terrorism operates within the Indian securities market.

The instruction follows the United Nations Security Council (UNSC) update to its ISIL (Da’esh) and Al-Qaida Sanctions List.

The communication, issued on October 23, 2025, implements Section 51A of the Unlawful Activities (Prevention) Act, 1967 (UAPA) which obligates financial and market intermediaries to prevent dealings with any person or organisation that have been designated under the UN Security Council resolutions for involvement in terrorism.

SEBI has emphasised on the intermediaries’ obligations under Clause 54 of its Master Circular on Anti-Money Laundering (AML) and Combating the Financing of Terrorism (CFT), dated June 6, 2024. The clause mandates that no accounts or dealings should exist in the name of individuals or entities appearing on UN-approved lists of persons suspected of having terrorist links.

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The update from the UN Security Council Committee amends one entry in the sanctions list concerning ISIL (Da’esh) and Al-Qaida.

As per the UN’s Note SC/16197 dated October 21, 2025, the entry of Abd El Kader Mahmoud Mohamed El Sayed, an Egyptian national, has been modified. He was listed for links to Al-Qaida, and the amendment updates identifying details, reaffirming his designation for asset freeze, travel ban and arms embargo under Security Council Resolution 2734 (2024).

In line with this, SEBI has instructed all regulated entities to immediately update their sanction-screening systems and verify that none of their clients are listed in the revised UNSC list.

Any requests for delisting received by a regulated entity are to be electronically forwarded to the Joint Secretary (CTCR), Ministry of Home Affairs (MHA) at jsctcr-mha@gov.in, with a copy to the Joint Secretary (UNP), Ministry of External Affairs (MEA) at jsunp@mea.gov.in.

The updated consolidated sanctions list can be accessed on the UN Security Council website and the specific ISIL (Da’esh) & Al-Qaida list is available on the official website of the UN.

SEBI, being a central regulator plays a paramount role in ensuring that the Indian securities market remains compliant with international anti-terror financing obligations and strengthens vigilance against potential misuse of financial systems by sanctioned entities.

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