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.