Friday 24th November 2017
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The Financial Markets Authority has warned Fullerton Markets, a major sponsor for the local Hurricanes rugby team, over sub-standard anti-money laundering systems and threatened legal action may follow if the issues aren't fixed.
The market watchdog issued a formal warning to the Wellington broking firm today, saying Fullerton didn't have robust systems to deter money laundering and the financing of terrorism, didn't carry out sufficient due diligence into its customers and failed to take reasonable steps to identify clients who are deemed to be politically exposed people. The regulator's sanction requires Fullerton to review all customers to figure out if they are politically exposed, set up appropriate transaction monitoring rules, implement a compliance programme and review its customer onboarding programme by the end of January.
"The FMA signalled in our last annual report that we would take formal action where we see firms failing to meet these requirements," regulation director Liam Mason said. "If Fullerton Markets fails to take the actions required in the warning, then the FMA will consider the need for further regulatory responses. This could include civil action, which can lead to penalties of up to $2 million per offence for a company."
The warning itself also points out that criminal sanctions are even harsher, with individuals facing up to two years' imprisonment and fines of up to $300,000 and corporates facing fines of up to $5 million.
New Zealand regulators, including the Reserve Bank, the Department of Internal Affairs and the FMA began monitoring financial institutions under new laws which came into effect in June 2013 in an attempt to prevent criminals from disguising the illegal origins of their money. In September, the High Court ordered the first award of financial penalties totalling $5.3 million under the regime when foreign exchange firm Ping An Finance was successfully prosecuted in a case taken by DIA.
In February, the FMA said it had issued warnings to 12 entities for failing to comply with the anti-money laundering rules, having signalled concerns in 2016 over the small number of suspicious transaction reports filed by the sector.
Fullerton Markets touts itself as Asia's fastest growing brokerage firm and was incorporated in 2015.
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