The Financial Markets Authority has published an Anti-Money Laundering and Countering the Financing of Terrorism monitoring report. This sets out the areas requiring further attention by the management and boards of the reporting entities it supervises.
The report summarises the FMA's monitoring activities from 1 July 2016 to 30 June 2018. During that period the FMA issued 18 formal warnings, including one public warning.
The FMA is one of three supervisors under the AML/CFT Act. The Department of Internal Affairs is the supervisor for lawyers.
The FMA supervises around 800 reporting entities, of which about two-thirds are financial advisers and the rest are derivatives issuers, brokers and custodians, fund managers, providers of discretionary investment management services, equity crowdfunding and peer-to-peer lending platform providers, licensed supervisors and issuers of securities.
The report highlights a number of issues that should be addressed by boards and management:
- AML/CFT programmes that have not been reviewed or updated to align with the current businesses’ current practices
- AML/CFT risk assessments that are not updated when changes in risks occur
- Customer due diligence including enhanced and ongoing account monitoring remains problematic for reporting entities. An increasing number of entities are using electronic identify verification, but the FMA noted a number of deficiencies with their AML/CFT programmes in this regard.
The FMA identified 89 issues requiring remedial action in the period to end of June 2017. This rose to 175 issues for the same period in 2018.