FMA Orders CLSAP NZ to Pay $770,000 for Anti-Money Laundering Breaches

The New Zealand’s Financial Market Authority announced today that CLSA Premium New Zealand Limited (hereinafter referred to as CLSAP NZ, formerly known as KVB Kunlun New Zealand Limited), the derivatives trading services arm of CLSA Premium Limited, has been ordered to pay a total pecuniary penalty of $770,000 for breaches of the Anti-Money Laundering and Countering Financing of Terrorism (AML/CFT) Act, following proceedings brought by the FMA.

According to the official press release, previously in June 2020, the regulator has filed proceedings, alleging CLSAP NZ failed to comply with its obligations under the AML/CFT Act between April 2015 and November 2018. These were the first court proceedings brought by the FMA under the AML/CFT Act.

The case was centred on transactions undertaken by a sample of 10 different CLSAP NZ customers, involving transactions totalling approximately $49.5 million, with $40.8 million of that total relating to deposits made by two customers.

CLSAP NZ and the FMA filed an agreed statement of facts in which CLSAP NZ admitted the following breaches:

• Failures to conduct enhanced customer due diligence in relation to 12 transactions;

• Failure to conduct customer due diligence in relation to one customer;

• Failures to terminate existing business relationships when customer due diligence could not be completed;

• Failures to report suspicious transactions / activity on nine occasions;

• ​Failure to keep records as required under the AML/CFT Act.

Currently, CLSAP NZ is suspended from offering derivatives to retail investors by the FMA.