According to the New Zealand Police Department, Mandatory Transactions are transactions that are processed through an International Funds Transfer Reporting Agent (IFTs) – an international transfer of NZD $ 1000 or more if at least one of the institutions involved in the transaction is in Is resident of New Zealand and at least one is located outside of New Zealand; and Large Cash Transactions (LCTs) – a domestic, physical cash transaction of NZD $ 10,000 or more in physical currency (ie, coins and printed money known as legal tender).
The law requires hotlines to report their prescribed transactions to the police’s Financial Intelligence Unit, says Reserve Bank Deputy Governor and General Manager of Financial Stability Geoff Bascand.
On Monday, the FMA announced that Sharesies had failed to meet its obligations by not collecting enough information about the customers’ reasons for using the app or to determine whether customers should be subject to an increased duty of care. It also states that the platform has failed to complete identity verification for customers with an account balance greater than $ 1000 as part of normal customer due diligence.
Sharesies have been instructed to make a number of changes to meet its obligations. Founded in 2017, the company made investing more accessible for the everyday kiwi.
James Greig, director of the FMA regulator, said they applaud the way online investment platforms like Sharesies have changed investing, but it’s important for fast-growing companies to make sure their compliance processes and guidelines are in step keep.
“We made this warning public because the share violations seemed symptomatic of a rapidly growing business without ensuring that fully effective processes and controls were in place for AML and CFT.
“It is important for all companies to understand our expectations under the AML / CFT Act. Sharesies has built a significant customer base in a short period of time and we believe the company will be vulnerable to money laundering if continued with current practices. We do not consider the violations to be deliberate. ”Sharesies is cooperating with the FMA and has taken steps to update and strengthen its practices.
“New Zealand’s anti-money laundering laws have been in place for some time and are designed to thwart criminals and preserve the integrity of our financial system. It is important that companies have the appropriate systems and controls in place.”
The full changes public companies must make include:
Obtain information from all current customers to explain their reasons for using the platform and modify the onboarding process to collect this information in the future
Development and implementation of a process to complete the identity verification at the time of the account application and training of the staff on these processes
Obtain adequate information from all customers who have used the word “trust” in the account application process and to exercise increased customer due diligence when dealing with trusts – a requirement under the law
adequately verify the identity of all customers and restrict withdrawals or transfers until such verifications are completed.
Sharesies isn’t the only company to face a warning. Earlier this month, the Reserve Bank of New Zealand issued a formal warning to Westpac New Zealand for violating the law.