New Zealand’s FMA Warns Sharesies for Breaching AML Rules

The Financial Markets Authority (FMA), New Zealand’s watchdog agency, issued a warning against Sharesies Limited and Sharesies Nominee Limited for not having the appropriate anti-money laundering protections in place.

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Specifically, Sharesies had failed to obtain information about the nature and purpose of the proposed business relationship from most customers and to obtain sufficient information to determine whether certain customers should be subject to enhanced customer due diligence.

In addition, Sharesies had been found not to complete identity verification for up to 7,815 customers who had an account balance of more than $1000 as part of standard customer due diligence.

Following the regulator’s findings, Sharesies are required to:

1. obtain information from all its current customers to show their reasons for using the platform and amend its onboarding process to capture this information in the future

2. develop and implement a process to complete identity verification at the time of account application and provide training to staff on these processes

3. obtain sufficient information from all customers who used the word ‘trust’ in the account application process and complete enhanced customer due diligence if they are trusts – a requirement under the Act

4. adequately verify the identity of all customers and restrict withdrawals or transfers until those checks are completed.

“We welcome the way online investing platforms like Sharesies have opened up the investing landscape in New Zealand, but it’s essential that fast-growing businesses ensure their compliance processes and policies keep pace,”James Greig, FMA Director of Supervision said.