New Zealand’s FMA reveals new focuses for AML/CTF

New Zealand’s Financial Markets Authority (FMA) will increase reviews on independent audits as well as client onboarding and account monitoring processes.  

The FMA has published its Anti-Money Laundering and Countering the financing of terrorism (AML/CFT) monitoring report in which it identifies areas which the management and boards of reporting entities need to increase attention.

This report covers the period from 1st July 2016 through to 30th June 2018. During this period the regulator issued 18 formal warnings.

Outlined in the report were areas which need to be addressed by companies. One of these was the AML/CFT programmes which have yet to be reviewed or updated to meet current business practises.

Other areas brought up were AML/CFT risk assessments which fail to be updated after risks occur, and customer due diligence still remaining problematic, including those using electronic identity verification.

In addition to this, the FMA revealed its future focus, which includes deeper reviews of independent audit reports, and the reviews of client onboarding and account monitoring processes. Another key area for focus will be around operation reviews and putting more focus on front-line staff that perform tasks like client onboarding, and assess if they understand their obligations.

The FMA uncovered 89 issues which need remedial action by the end of June 2017, which then increased to 175 issues during the same period in 2018.

FMA director of regulation Liam Mason said, “The laws surrounding anti-money laundering and countering the financing of terrorism have now been in place for more than five years. We expect to see more mature policies, procedures and controls in place.

“The FMA is requiring more entities to take remedial action following its monitoring. This is more likely now to be accompanied by formal enforcement action, as we expect reporting entities to understand and meet their obligations. Entities have had enough time to prepare now, and it is only fair to the vast majority of organisations we supervise who meet the legal requirements.”

The FMA is one of three AML/CTF supervisors in New Zealand, working alongside the Reserve Bank of New Zealand and the Department of Internal Affairs. FMA monitors around 800 entities.

Enjoying the stories?

Subscribe to our daily FinTech newsletter and get the latest industry news & research

Investors

The following investor(s) were tagged in this article.