Glossary

Processing of a child’s personal data (under 18) requires verifiable parental or guardian consent. Children are included via their guardians to ensure lawful and informed data handling, with the Act prohibiting targeting or profiling without safeguards.

Parol evidence rule is a legal doctrine that prevents parties from using oral or extrinsic evidence to contradict, vary, or add to the terms of a written contract that appears to be whole and final. It helps preserve the integrity of written agreements.

Participants are intermediaries such as banks, brokers, or financial institutions authorized by SEBI. They connect investors to depositories by opening demat accounts, managing electronic securities, and facilitating transactions. All depository services are accessed by investors through these participants.

A PFFI is an FFI that registers with the IRS and agrees (via FFI Agreement or Model 2 IGA) to identify and report U.S. account holder data. They comply with FATCA’s due diligence and withholding rules and are exempt from the 30% withholding tax on withholdable payments.

States must criminalise participation in corruption offences as accomplices, instigators, or aiders, along with attempts and preparatory activities. Making it illegal to assist or attempt corruption?even if unsuccessful?strengthens enforcement and helps prevent corruption before it occurs.

Property held by a partner on behalf of the firm using accounted-for partnership funds is not considered benami. This exception recognizes the legal relationship between partners and the firm, provided transactions are transparent and documented. If personal property is held in a partner’s name without firm funding, it may still attract benami scrutiny.

Passive bribery involves a public official’s solicitation, acceptance, or agreement to receive undue advantage to act in their official duties. UNCAC mandates criminalizing this for national officials, and encourages it for foreign officials, reinforcing accountability on both supply and demand sides.

Passive bribery involves requesting, agreeing to receive, or accepting a financial or other advantage with the intent to perform a relevant function improperly. It is the mirror offence of active bribery, penalising the recipient rather than the giver, and applies equally to public and private sector roles.

A passive NFFE is a non-financial foreign entity deriving more than 50% of its income from passive sources (e.g., dividends, interest). FATCA requires passive NFFEs to disclose their substantial U.S. owners or face 30% withholding on U.S.-source payments, closing a key loophole for hidden U.S. ownership.

A patent is a legal right granted to an inventor that gives them exclusive authority to make, use, and sell an invention for a specified period, typically 20 years. It protects new, useful, and non-obvious inventions, encouraging innovation by preventing others from using the patented invention without permission.

U.S. anti-terrorism laws to prevent and punish acts of terrorism, including money laundering provisions.

Regulations preventing use of specific correspondent rails or nations.

A Payment System Operator is an individual or entity responsible for operating a payment system as defined under the PMLA. They are considered financial institutions and are subject to anti-money laundering regulations, including customer due diligence and transaction reporting obligations.

Security standard for payment systems cardholder data protection.

Non-critical UPI services, such as balance checks and AutoPay, are blocked during high-traffic hours (10?AM?1?PM and 5?PM?9:30?PM), ensuring reliable transaction performance.

During UPI peak consumption periods (10?AM?1?PM & 5?PM?9:30?PM), non-money APIs such as balance checks and autopay executions are blocked or rate-limited to maintain smooth transactional flow.

The Act allows significant penalties for violations: up to ?250?crore for fiduciaries, and up to ?10,000 for principals in cases of wrongdoing. These financial penalties ensure real consequences for misuse, non-compliance, or false complaints, strengthening data protection within India.

Under the Act, anyone found involved in benami transactions faces imprisonment for up to three years and/or a fine up to 25% of the fair market value of the property. This strict penalty aims to deter illegal benami dealings.

Under the Black Money Act, failure to disclose foreign income or assets attracts a 90% penalty of the value of the undisclosed asset. This is in addition to the 30% tax. The total financial outgo becomes 120%, not counting possible imprisonment, emphasizing the seriousness of concealment.

Hierarchy OFAC uses for assessing severity of sanctions breaches.

RBI recently penalised Experian twice in 2023 and 2025 (?26 lakh, ?2 lakh) and TransUnion?CIBIL (?26?lakh) for compliance failures under CICRA .

All registered Pension Funds must include the words “Pension Fund” in their name. Existing funds must comply within 12 months to ensure transparency and brand clarity.

Revised regulations require all Pension Funds to include "Pension Fund" in their name and comply within 12 months, enforcing clarity and avoiding misrepresentation?new or existing funds must re-brand to comply.

Senior public official who can pose greater corruption risk.

NSE sends end-of-day lists identifying client codes flagged as Persistent Noise Creators (PNCs)?those with excessive unexecuted order messages. Members must use these lists to monitor and discipline clients whose order behavior disrupts market equilibrium, preventing algorithmic noise from affecting fair play.

PNCs are trading members or client codes emitting a high ratio of order-to-trade messages?such as frequent cancellations, order spoofing, or excessive message traffic. NSE tracks PNC activity over rolling periods and may impose penalties, cooling?off periods, or access restrictions to reduce system noise.

A "person in absentia" is someone who deliberately avoids appearing before a court despite summons, typically by remaining outside India. Such absence triggers action under the Act, including publication of notice and potential declaration as a Fugitive Economic Offender.

individual residing in India for more than 182 days during the preceding financial year. It excludes individuals who have gone out of India or stay outside India for employment, business, or any other purpose indicating an indefinite period of stay abroad.

A "Person Resident Outside India" means a person who is not a resident in India. This includes non-resident individuals, foreign nationals, and foreign entities.

Any information relating to an identified or identifiable person?such as name, ID number, IP address, or location data?falls under GDPR. This broad definition triggers legal obligations on holders of such data, requiring accountability and protection measures.

A personal data breach involves accidental or unlawful destruction, loss, alteration, unauthorized disclosure, or access to personal data. Controllers must report such breaches within 72 hours, and if there’s high risk, inform data subjects without delay.

Petty corruption refers to small-scale corrupt practices typically involving low- or mid-level officials. It often includes bribery for routine services, such as securing permits, licenses, or other government services. While individually minor, it accumulates over time, undermining public trust, hindering development, and perpetuating inequality by normalizing dishonest behavior in everyday interactions.

Phase?4 is the Convention’s most advanced evaluation stage, assessing not just laws but real enforcement outcomes, investigation effectiveness, and deterrence. It covers issues like foreign bribery, enforcement, and cooperation, and often triggers country-level policy reforms upon public reporting of findings.

Phishing is a type of cybercrime where attackers pose as trustworthy individuals or organizations?often through email or other forms of communication?to trick victims into revealing sensitive information. These messages typically contain malicious links or attachments designed to steal login credentials, account numbers, or other personal data.

Phishing scams in crypto involve tricking users into revealing private keys or login info via fake websites, emails, or messages that impersonate trusted services. Attackers then access wallets and steal funds. These scams exploit human trust and are a major threat in the crypto space.

The practice where the controllers of a company deliberately avoid paying liabilities by shutting down an indebted company and transferring assets to a new company, leaving the old company's debts unpaid.

Pig butchering is a crypto scam where fraudsters build long-term trust with victims, often through social media or dating apps. They then convince victims to invest large sums in fake crypto projects or schemes. The scam “fattens” victims before abruptly stealing their money. It’s a sophisticated, emotionally manipulative fraud targeting individuals.

Data piracy occurs when individuals access and claim intellectual property as their own. With permission, piracy involves profiting from another's intellectual property. One of the major challenges in cyberspace is software piracy. The illegal copying, distribution, or usage of software is known as software piracy. The BSA estimates that 36% of current software is stolen. Today, software piracy significantly reduces publisher revenue. Intellectual property rights refer to the ownership of one's mental inventions. The inventor typically receives exclusive rights to utilize their creation for a specific duration. Intellectual property includes literacy, art, and science. This article examines the economic implications of protecting intellectual property rights (IPRs) inside the WTO TRIPS agreement. The article discusses the role of IPR protection in encouraging growth and development and its relationship with other economic policies

Money laundering first stage, introducing illegal money into circulation.

This is the initial money laundering stage?when illicit funds enter the financial system via deposits, purchases, or transfers. Wolfsberg frameworks highlight the importance of deposit monitoring and early Detection & Respond protocols during placement to thwart laundering at its source.

Pleadings are formal written documents filed by parties in a legal case to state their claims, defenses, or other legal positions. They include complaints, answers, and sometimes counterclaims. Pleadings serve to inform the court and the opposing party of the issues in dispute, helping structure the litigation process and guide what the trial will address.

Investors can pledge dematerialized securities (e.g. shares) as collateral for loans. The depository holds a record linking pledged securities until debt is repaid and release instructions are issued.

Beneficial owners may pledge their demat securities as collateral for loans. The depository records such pledges electronically without transferring physical securities. This helps in securing credit while retaining ownership

Amendments effective February?2024 extend PMLA applicability to pension funds?bringing anti-money laundering, KYC, internal reporting, and STR compliance under regulatory oversight. Principal Officers must meet “fit & proper” standards, and Pension Funds must submit compliance certificates to PFRDA.

CICs are now under PMLA jurisdiction?mandating AML/KYC processes. Reporting suspicious borrower profiles and cross?referencing FIU?IND alerts are prerequisites.

A poison pill is a defense strategy used by a company to prevent or discourage a hostile takeover. It makes the company less attractive to the potential acquirer by triggering actions?such as allowing existing shareholders to buy more shares at a discount?that dilute the value and make the takeover more expensive or difficult to complete.

PFRDA mandates that pension fund intermediaries (like NPS POPs/Trustees) report actual or suspected fraud within three weeks (FMR?1) and annually include pending and closed fraud cases (FMR?2,3) to Surveillance & Investigation Dept and law enforcement?enabling timely AML, fraud detection, and transparency.

Intermediaries must implement policies covering fraud detection, immediate containment, recovery, indemnification, and regulatory reporting (FMR?1/2/3 forms). They are required to report fraud detection within 3 weeks, outstanding cases annually, and closed cases each year?promoting accountability and operational transparency.

A policyholder is an individual or organization that owns an insurance policy. They are responsible for paying the premiums and have the right to receive benefits or coverage as outlined in the policy. The policyholder can file claims and make decisions related to the insurance contract during its term.

Robust underwriting and claims verification systems must detect abnormalities such as inflated or falsified claims, misrepresented facts, or fake documents. Insurers should deploy advanced analytics, public awareness programs, and structured claim checks to prevent fraud and safeguard claim integrity.

Under the Act, political or charitable donations may amount to bribery if given with the intent to influence someone improperly or to gain business. Even donations to non-UK public officials can breach the law if aimed at securing an improper business advantage. The legitimacy of a contribution depends on the donor’s intention rather than its recipient or purpose alone.

Political corruption involves the misuse of power by individuals in authority for personal or political gain. It includes various forms of misconduct, such as bribery, extortion, nepotism, patronage, influence peddling, embezzlement, and more. Political corruption erodes public trust, undermines democratic institutions, and hinders effective governance, often leading to social and economic harm.

A PEP is an individual who holds or has held a prominent public position, such as a senior government official, politician, or judicial officer. Due to their position and influence, PEPs are considered higher risk for potential involvement in corruption, bribery, or abuse of power. Financial institutions apply enhanced due diligence measures when dealing with PEPs to prevent misuse of the financial system for illicit purposes.

A Ponzi scheme is a fraudulent investment scam promising high returns with little risk. Early investors are paid returns using money from new investors, not from profit. The scheme relies on continuous recruitment and eventually collapses when new investments stop. Many crypto scams operate as Ponzi schemes, deceiving investors with false promises.

Pool trading is a scheme where a group of traders collaborates to buy and sell a security among themselves to create artificial trading activity and manipulate the stock’s price. This coordinated activity misleads other investors by creating the illusion of genuine market interest, which is illegal under securities laws.

Debarment from entry or servicing of ships linked to sanctioned parties.

These regulations govern entities that manage investment portfolios on behalf of clients, stipulating fit?and?proper criteria, minimum net worth, fee structures, conflict?of?interest policies, and disclosure obligations. They mandate guidelines on client agreements, portfolio diversification, risk management and grievance handling to ensure investor protection and professional standards in discretionary and non-discretionary portfolio management services.

Post-legislative scrutiny reinforced that hospitality is legal if intended to develop business relationships. Yet, overly generous expenditure may suggest inducement. The review recommended including realistic examples in guidance, particularly regarding multicultural norms, to support businesses in understanding acceptable hospitality boundaries.

Post-merger integration (PMI) is the process of combining and reorganizing two companies after a merger or acquisition. It involves aligning operations, cultures, systems, and teams to realize the benefits of the deal, such as cost savings and improved efficiency, while minimizing disruption.

Investors may designate a POA holder to operate their demat account on their behalf. Such powers are registered with DPs and can be revoked via Customer Service Requests (CSRs).

Power-control theory explains how family dynamics and gender roles influence delinquent behavior. It suggests that differences in parental control over boys and girls affect their likelihood of engaging in criminal activities, with boys typically experiencing less supervision and thus higher rates of delinquency.

Members must build systems that block orders placed far outside the market-determined value?such as prices at extreme ends of the allowed range?to prevent accidental or manipulative orders and maintain orderly price discovery as per NSE circulars.

Before execution, trading systems must block orders placed far from fair market value or outside prescribed ranges. This helps prevent erroneous or manipulative trades, preserving orderly price discovery and aligned with NSE circulars on Pre?Trade Risk.

A predicate crime is the underlying offense that generates the illegal funds eventually laundered. Crimes like fraud, bribery, or drug trafficking serve as the foundation for money laundering processes.

The original scheduled offence that generates proceeds subject to laundering. Money laundering is a secondary crime dependent on the existence of the predicate offence.

Premium is the amount of money a policyholder pays an insurance company in exchange for coverage. It can be paid monthly, quarterly, or annually, based on the policy terms. The premium amount is calculated by assessing the risk, coverage limits, and other factors related to the insured person, property, or event.

FEOA introduces a reverse burden where, once someone is declared an FEO, it’s presumed that their properties are proceeds of crime unless they prove otherwise. This provision empowers enforcement by shifting the burden to the offender.

If a foreign asset is held in the name of a relative, associate, or trust, and the taxpayer cannot explain the source, authorities may presume beneficial ownership. Under the Black Money Act, this presumption enables tax authorities to tax and penalize the individual as the true owner of the asset.

The Act presumes a property is benami unless proven otherwise by the person claiming ownership, shifting the burden of proof to the claimant. This legal presumption helps enforce stricter action against concealed ownership.

UNCAC calls for comprehensive anti-corruption strategies, policies, and action plans with regular assessments and coordination across public institutions. This fosters an integrated approach to tackling corruption at national and sectoral levels.

Preventive controls are measures put in place to stop errors, fraud, or unwanted events from occurring in the first place. They work proactively to reduce risk by enforcing policies, approvals, or validations before transactions or activities are completed.

Price fixing is an illegal agreement between competitors to set prices at a certain level, rather than letting market forces determine them. This practice eliminates fair competition, leads to higher prices for consumers, and violates antitrust laws. Authorities actively investigate and penalize price-fixing to protect market integrity.

Price rigging is a form of market manipulation where individuals or groups collude to fix, raise, lower, or stabilize the price of a security or commodity, disrupting free market competition. This illegal practice deceives investors and undermines market fairness by artificially controlling prices rather than allowing them to be set by supply and demand.

REs must prominently display minimum, maximum, and average interest rates at all branches and literature. Loan pricing models and penal fees must be clearly communicated in product materials.

Restrictions imposed directly against domestic individuals/entities of the sanctioning country.

Wolfsberg’s 2022 “AI Principles” guide the use of AI and ML in AML compliance. Core principles include Legitimate Purpose, Proportionate Use, Technical Design, Accountability, and Transparency. The guidelines encourage robust validation, governance, and ethical adoption of new technologies in monitoring and analytics.

These principles govern how FIUs exchange financial intelligence within the Egmont network. They require that requested data be used solely for the intended AML/CFT purpose, mandate prior consent from the supplying FIU, and uphold confidentiality?ensuring trust and optimized, ethical collaboration

Privacy by design is an approach that integrates privacy and data protection principles into the development of products, services, and systems from the outset. This proactive strategy helps minimize data risks, ensure compliance, and build user trust throughout digital transformation processes.

Financial services must embed data protection throughout systems and processes?from design to deployment. This includes pseudonymisation, encryption, minimal data collection, and purpose limitation. Demonstrable implementation guards against fines and enhances customer trust.

Also known as a Data Protection Impact Assessment, a PIA is a structured process for identifying and minimizing privacy risks in processing operations that may significantly impact individuals. Required for scenarios like profiling or large-scale transaction data processing, it documents decision points and safeguards.

Under the Wolfsberg Private Banking Principles, banks must define what counts as "unusual or suspicious" in their context and outline investigation protocols. These include triggers, escalations to compliance officers, and decisions regarding relationship continuation or reporting.

Privity of contract is a legal doctrine stating that only parties involved in a contract have the rights and obligations under that contract. Third parties who are not part of the agreement generally cannot enforce or be bound by its terms, limiting contractual rights and liabilities to the contracting parties alone.

Proactive threat detection involves identifying potential cyber threats to AI systems before they escalate into serious attacks. Cybercriminals often use sophisticated methods to exploit vulnerabilities, aiming to access sensitive data or disrupt operations. By detecting unusual activity early, organizations can respond swiftly, preventing damage and maintaining the integrity of their AI systems and workflows

Proactive threat detection is a crucial component of any AI security strategy. As cyber threats evolve, attackers are increasingly targeting AI systems for their valuable data and to disrupt workflows. By continuously monitoring your AI models and infrastructure, you can identify potential vulnerabilities before they are exploited.

This set of regulations outlines the conduct, frequency, and agenda for SEBI board meetings. It includes quorum norms, notice period, documentation, voting procedures, conflict-of-interest disclosures, and record-keeping obligations. The aim is to ensure SEBI’s governance remains transparent, structured, and compliant with statutory standards.

Proceeds of benami property include any income, profit, or benefit derived directly or indirectly from benami transactions. The Act allows authorities to confiscate not only the benami property but also its proceeds to prevent any financial gain from illegal ownership.

Processing fees charged to borrowers cannot exceed 1% of the loan amount, and cannot be rolled into margin calculations, ensuring borrowers aren't overcharged.

REs can charge a maximum 1% processing fee, which must not be capitalised into loan balances, ensuring borrowers pay reasonable charges transparently.

Processing personal data of minors (below 18) requires verifiable parental or guardian consent, prohibits behavioral tracking, profiling, or targeted advertising, unless higher age norms are notified. This ensures children’s data is handled with increased care.

Procurement fraud is a deliberate act of deception during the acquisition of goods or services, often involving bribery, bid rigging, or false invoicing. It typically includes collusion between employees and vendors, resulting in inflated prices or substandard products. This fraud undermines fairness, wastes resources, and damages the credibility of procurement systems in both public and private sectors.

These are professionals?lawyers, accountants, or consultants?who, knowingly or not, assist in facilitating financial crimes by providing services that help obscure the source or ownership of illicit funds.

An individual or entity that offers specialized services to criminals to launder illicit funds for a fee, often utilizing complex schemes to obscure the origin of the money.

The Act prohibits purchase or holding of property in another person's name without actual consideration by the named holder. Such transactions are illegal and attract confiscation and penalties to prevent misuse of benami arrangements for tax evasion or money laundering.

These regulations aim to prevent fraudulent and unfair trade practices in the securities market, including market manipulation and misinformation. They provide a framework for identifying and penalizing such activities.

These regulations aim to prevent insider trading by prohibiting the misuse of unpublished price-sensitive information. They mandate disclosures by insiders and prescribe a code of conduct for listed companies to ensure fair trading practices.

Section 313 of the Act prohibits U.S. banks from maintaining correspondent accounts for foreign shell banks?banks with no physical presence. This measure aims to prevent illicit fund transfers through non-transparent institutions.

Property under the Act includes both movable and immovable assets, whether tangible or intangible. It includes land, buildings, shares, or any asset held in another’s name to hide ownership. Such benami property is subject to confiscation without compensation.

UK prosecutors weigh factors such as recurrence, size, policy compliance, and public interest in deciding prosecutions?particularly for facilitation payments. Minor, isolated, self-reported incidents may not be pursued whereas systematic or large bribes likely will be prosecuted.

Prosecution under this Act applies to individuals who willfully conceal foreign assets or provide false returns. Offenders can face rigorous imprisonment ranging from 3 to 10 years, along with financial penalties. Prosecution is launched in criminal courts and aims to create deterrence against black money hoarding abroad.

States must adopt measures to protect whistleblowers, witnesses, experts, and victims?including protection from retaliation and safety protocols?to encourage reporting and participation in corruption investigations.

A protective order is a directive issued by a court to safeguard a party or witness from harassment, annoyance, or undue burden, often in the context of discovery. It can limit the scope of disclosure or dictate the manner in which sensitive information is handled.

A PAO is issued by the ED to temporarily attach property believed to be involved in money laundering. This order is valid for 180 days and prevents any sale, transfer, or movement of the asset, ensuring it remains available for confiscation.

Prudential regulators primarily focus on the financial soundness of institutions, assessing whether they maintain adequate capital and liquidity to withstand economic downturns and manage financial risks effectively. In addition to overseeing these key financial metrics, prudential regulators ensure that banks and other financial institutions have strong internal controls and risk management systems in place.

This involves processing personal data so it cannot be identified without separate information. Used in analytics, open banking, or fraud monitoring, pseudonymized data reduces risks while remaining useful. Effective pseudonymisation supports compliance under Articles 25 and 32.

Insurers must regularly conduct awareness campaigns?via customer communications or social media?to educate policyholders about fraud tactics, digital hygiene, and reporting channels. These campaigns strengthen frontline vigilance among customers and help reduce accidental fraud victimization.

Public interest disclosure is the act of reporting wrongdoing?such as corruption, environmental harm, or public safety threats?that affects the broader community, not just an individual or organization. It is typically protected by law to encourage individuals to come forward when the public good is at stake.

PIDA is a UK law protecting workers who report wrongdoing or “whistleblow” in the workplace. It shields employees from unfair dismissal or retaliation when they disclose issues in the public interest, such as fraud, health risks, or environmental damage.

Regulators make sanctions breaches public to discourage them.

A “public official” is anyone holding a legislative, executive, administrative, or judicial office of a State Party, or performing a public function or service (including in state-owned enterprises), as defined by domestic law. This broad definition ensures that individuals entrusted with public duties are included in corruption prevention and criminalization measures.

The Act extends to public officials from any jurisdiction. Offering gifts, hospitality, or payments to non-UK officials in exchange for a business advantage can constitute a UK offence under Section 6. Interpretation centers on intent and performance improvement, not whether such acts are criminal in the recipient’s country.

The Convention mandates that public procurement processes be objective, transparent, and efficient. Rules must promote competition, prevent abuse of discretion, disclosures of interests, and strengthen oversight?reducing risks of corruption in government contracting and public sector purchases.

Egmont includes NGOs and international bodies (e.g., UNODC, FATF, World Bank) as observers. Although they don't access ESW, they contribute through advice, training, and technical assistance?expanding FIU reach and policy coherence.

Pump and dump is a fraudulent scheme where manipulators artificially inflate a stock’s price by spreading false or misleading information. Once the price rises, they sell their shares at a profit, leaving other investors with losses when the price crashes. This illegal practice deceives investors and undermines market integrity.

A purchase agreement is a legally binding contract between a buyer and a seller that outlines the terms and conditions of a merger or acquisition. It details the assets or shares being sold, purchase price, representations, warranties, covenants, and closing conditions to ensure both parties agree on the deal specifics.