The Financial Market Authority (FMA) has officially warned the share trading platform Sharesies for failing to comply with the anti-money laundering regulations (AML).
Photo: 123RF
The FMA found that Sharesies did not determine the reasons customers used the platform, did not check whether certain users should be subject to greater due diligence, and the identity of 7815 customers with an account balance greater than this. not checked as $ 1000.
These are standard practices for financial services companies covered by the Anti-Money Laundering and Terrorist Financing Act (AML / CFT).
The issues were highlighted in a review of the public limited companies’ processes by the FMA and there was no indication that the company was engaged in money laundering activities.
“We made this warning public because the share violations seemed symptomatic of a rapidly growing business without ensuring that fully effective processes and controls for AML and CFT (anti-terrorist financing) are in place,” said FMA- Called Superintendent James Greig.
“Public company violations seemed symptomatic of a rapidly growing business without ensuring that fully effective processes and controls were in place for AML and CFT.”
Greig said it did not consider the share violations to be deliberate.
James Greig, Director of the Financial Market Authority (FMA)
Photo: Delivered / FMA
The FMA has instructed the share trading platform to collect information from all customers in order to understand why they are using the platform, develop procedures to properly verify the identity of customers, and conduct reviews of customers who may be using Sharesies as a trust company.
It is also required to limit withdrawals for affected customers until all of these verifications are completed.
Sharesies chairwoman Alison Gerry said the company is taking the matter very seriously and has taken steps to address the issues.
That included asking specific questions of customers, using biometrics to back up customer identities, and putting tighter controls on people who act as trusts, Gerry said.
“Sharesies does not currently endorse or promote the use of the platform by trusts,” said Gerry.
She said the 7,815 customers who had to have their identities verified represented 2 percent of the total user base.
“Sharesies reached out to all of these customers to create a clearer link between them and their identity documents,” said Gerry.
“More than half of the relevant customers have now completed the identification process.”
There were no customer funds at risk, she said.
