Reporting entity obligations require identity verification, enhanced due diligence and prescribed recordkeeping to support regulatory oversight.
Reporting entities must verify client identity and beneficial ownership, perform enhanced due diligence on specified transactions including examining ownership, financial position and sources of funds, and record transaction purpose and intended relationship. They must maintain and furnish records in the prescribed manner for a prescribed retention period, respond to Director requests for records and information while maintaining confidentiality, and comply with rules on record maintenance and furnishing.

Reporting entity designation expands under PMLA, bringing new activities and professionals within AML obligations.
The PMLA targets prevention of money laundering and confiscation of proceeds; money laundering encompasses concealment, possession, acquisition, use or projection of proceeds as untainted property through placement, layering and integration. A reporting entity-including banks, financial institutions, intermediaries and persons carrying on designated businesses or professions-is subject to AML obligations. Central Government notifications expand the definition of designated businesses to include specified professionals, real estate agents, dealers in precious metals, virtual digital asset service activities and provider functions such as company formation agents, nominee shareholders and registered office providers, with prescribed exclusions.