New Zealand’s FMA Flags Tiger Brokers for Weak AML Protections

The Financial Markets Authority (FMA) of New Zealand announced this Monday that it has issued a formal warning to Tiger Brokers (NZ) Limited, a New Zealand Exchange (NZX) accredited broker, for not having the appropriate anti-Money Laundering Money Laundering Money laundering is a blanket term to describe the process by which criminals disguise the original ownership and proceeds of criminal conduct by making such proceeds appear to be derived from a legitimate source.Money laundering is an issue that traverses countless industries and sectors, which includes the financial services space. Though criminal money may be successfully laundered without the assistance of the financial sector, billions of dollars’ worth of criminally derived money are laund Money laundering is a blanket term to describe the process by which criminals disguise the original ownership and proceeds of criminal conduct by making such proceeds appear to be derived from a legitimate source.Money laundering is an issue that traverses countless industries and sectors, which includes the financial services space. Though criminal money may be successfully laundered without the assistance of the financial sector, billions of dollars’ worth of criminally derived money are laund Read this Term protections in place.

In addition to shining the light on Tiger Brokers, the New Zealand authority has also identified another six businesses for their anti-money laundering practices. The regulator has decided not to name these entities.

The FMA uncovered the anti-money laundering issues with these companies as part of its ongoing monitoring of around 800 businesses that report to the regulator under the Anti-Money Laundering and Countering Financing of Terrorism (AML/CFT) Act.

FMA: Tiger Brokers didn’t adequately verify customers

In terms of Tiger Brokers, the Kiwi regulator found a series of issues. According to the statement released today, that broker didn’t:

• adequately conduct enhanced and ongoing customer due diligence where required.
• adequately verify relevant customer identification documents.
• obtain adequate source of fund or wealth information relating to high-risk customers, and take reasonable steps to verify that information.
• report suspicious activity to the relevant authorities within three working days after forming a suspicion.
• take reasonable steps to determine whether a customer or any beneficial owner is a politically exposed person.
• The FMA concluded there were reasonable grounds to believe the business had contravened the Act.

Following the regulator’s findings, the stock trading broker has to submit a plan to the FMA before the 17th of April 2020. In this plan, the firm must outline how it will fix the issues identified to be compliant. It will then have until the 30th of September to implement these actions or face enforcement action, the statement said.

Commenting on the findings, James Greig, head of supervision at the FMA, said in the statement: “Warnings are an important regulatory tool for the FMA because they can force faster change than court proceedings. In these cases, formal warnings were the most proportionate response to the conduct by the firms in question. A public warning is designed to send a signal that we have issues with a company, and they need to address the concerns we have raised.

“The severity of Tiger Brokers’ likely breaches meant that a public warning was necessary, especially because it is a large business that is growing fast in New Zealand. The issues were wide ranging and weren’t minor or technical, meaning there was potential for immediate and ongoing damage to the integrity of our financial markets.”