The Financial Markets Authority says it has issued formal warnings to 10 reporting entities under section 80 of the Anti-Money Laundering and Countering Financing of Terrorism Act 2009.
It says it carried out a risk-based assessment of independent audit reports for reporting entities it supervises in February 2019, targeting 69 reporting entities. The FMA supervises around 800 reporting entities, of whom roughly two-thirds define themselves as financial advisers.
After this review, the FMA issued five formal warnings to reporting entities for failing to have their risk assessment and AML/CFT programme audited every two years and five formal warnings to reporting entities who had their risk assessment and AML/CFT programme audited, but where the audit was not done in a timely manner, occurring months after its due date.
It says 14 further desk-based reviews and four monitoring visitis will be carried out in response to this work.
The FMA also issued a compliance letter to one additional reporting entity requesting follow up action by the entity.
The entities involved are all either small businesses or individuals and naming the entities involved would be a disproportionate penalty given the nature of the issues involved.
The FMA has previously said it expects to see more robust AML/CFT policies and procedures in place, given that AML/CFT laws have been in force for more than five years.
Last month, the FMA highlighted that in future, there would be an increased focus on reviewing independent audit reports on AML/CTF processes.