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FMA issues AML/CFT warning to Circle Markets

21 October 2019

The Financial Markets Authority (FMA) has issued a formal warning to a non-licensed derivatives issuer and forex provider, Circle Markets Ltd, under the Anti-Money Laundering and Countering Financing of Terrorism Act 2009 (AML/CFT).

Following a review of a sample of client files at an onsite monitoring review, the FMA found that Circle Markets had failed to:

  • Adequately verify identity information for some customers, as per standard customer due diligence.
  • Obtain additional identity requirements and verify the identity requirements for enhanced customer due diligence for a customer, such as the source of the funds or the wealth of the customer.
  • Take reasonable steps to determine whether a customer or any beneficial owner, is a politically exposed person.
  • Conduct adequate ongoing customer due diligence for some customers and undertake account monitoring.

Circle Markets has not disputed the FMA’s findings and its sole director (also the AML/CFT compliance officer) admitted he did not fully understand his AML/CFT obligations.

Circle Markets is required to undertake a series of actions to ensure it complies with its obligations, including engaging an independent AML/CFT auditor to review its practices.

The company is required to provide the FMA with a report by March 2020. Failure to undertake the actions could result in civil or criminal enforcement action.

“Circle Markets has demonstrated a general lack of understanding and knowledge of its AML/CFT obligations. However, it appears to be taking steps to ensure future compliance. For example, its sole director and an employee completed an AML/CFT training course earlier this year,” says Liam Mason, FMA Director of Regulation.

“Financial services firms ought to be aware of their AML/CFT obligations as this legislation has been in effect for some time. We have little patience for non-compliance. If a provider is unsure of their responsibilities, we encourage them to seek professional or legal advice.”

The warning was issued under section 80 of the Act.

Last updated on the 21st October 2019