The Financial Markets Authority, the capital markets regulator, has issued a formal warning to MSL Capital Markets after the Wellington brokerage's late audit of its system to meet anti-money laundering legislation.
Under the Anti-Money Laundering and Countering Financing of Terrorism Act companies must audit their risk assessment and programmes every two years and submit the report to the FMA. MSL's audit was due last October, to be submitted in November, which it failed to do, leading the regulator to issue a formal warning, the FMA said in a statement.
A spokesman for MSL said there has been "an oversight and we have to take this on the chin and comply quickly," and that prior to the warning it had engaged auditors to complete the report.
MSL has now undertaken action and had committed to providing the FMA with a copy of the audit, the regulator said.
FMA's warning comes after JPMorgan Chase Bank's New Zealand branch was given a formal warning by the Reserve Bank for a four-month period in 2013 when it didn't have appropriate risk assessment measures in place to meet the act. The central bank today issued a formal warning to the JPMorgan branch, saying it "has reasonable grounds to believe that for a period of approximately four months in 2013" the lender's risk assessment didn't fully meet all the requirements of the Anti-Money Laundering and Countering Financing of Terrorism Act, it said in a statement last week.
The Reserve Bank, Department of Internal Affairs and Financial Markets Authority officially started monitoring financial institutions under the anti-money laundering regime from June 30, 2013, with an initial focus on monitoring and compliance to ensure firms were able to identify and report suspicious activity.