The Financial Markets Authority (FMA) formally warned Tiger Brokers (NZ) Limited and six other companies for deficiencies spotted in the anti-money laundering practices. Many of these companies were reported to be late in auditing their systems and controls. This is part of the ongoing monitoring of about 800 businesses that report to the regulator under the Anti-Money Laundering and Countering Financing of Terrorism (AML/CFT) Act. According to FMA, Tiger Brokers had failed in conducting due diligence when necessary, effectively verifying customer identification documents, verifying the source of a fund associated with high-risk customers. FMA also stated that it failed in reporting suspicious activity to appropriate bodies within three working days. On this basis, the FMA concluded that Tiger Brokers has violated the Act.
In view of these, FMA has instructed the company to prepare a plan illustrating when and how it will address the identified issues and ensure compliance with the Act; and submit to the regulator before April 17, 2020. Not only that, but it must have also executed all the plans by 30 September 2020 or face penalty. The head of supervision at FMA, James Greig justified the warning given to Tigers Brokers saying that warnings are an important tool used by the agency to facilitate change and compliance. However, the warnings are not indications that businesses have allowed the occurrence of illegal activity. They were issued according to section 80 of the AML/CFT Act. Besides, he stated that six other companies, whose name were not revealed, failed in providing an audit of its AML risk assessment and programme. AML supervisors in New Zealand recently outlined ways businesses can ensure due diligence during the spread of COVID-19.