by Susan Edmunds
The FMA is the sector supervisor for issuers of securities, trustee companies, futures dealers, collective investment schemes, brokers and financial advisers who are reporting entities under the AML legislation.
It this month issued a public formal warning to MSL Capital Markets Ltd. The company had been asked to perform an audit of its risk assessment and AML programme by the end of October last year and give the FMA a copy.
But it did not perform the audit or offer the FMA a copy of the audit report.
In the year to June last year, the FMA asked 82 reporting entities to complete an audit early. An FMA spokeswoman said that was done to reduce the risk that there would be insufficient audit resources available if all reporting entities’ reports were done at the same time.
Businesses must complete an audit every two years or as requested. That means most businesses’ will have their first audit due two years after the legislation was first enacted, on June 30 this year.
The FMA spokeswoman said that as well as asking for audits early due to practical concerns, it had also taken action because of fears businesses were non-compliant.
She said it had issued three formal non-public warnings to reporting entities. Five reporting entities were asked to complete an earlier audit due to concerns.
But she said the MSL Capital Markets warning was the first time a business had been warned publicly.
“As noted in our AML/CFT monitoring report, we have issued formal warnings before, but not publicly. All other entities have provided the audit reports requested of them or have engaged with us to verify their position,” she said.
MSL Capital Markets Limited is now required to provide a copy of its AML/CFT audit report to the FMA by April 20.
"This is later than the date provided in the formal warning because the firm engaged by MSL Capital Markets Limited to complete the work was not immediately available. We have agreed to this date based on MSL’s engagement with us and the auditor since we issued the warning," the FMA said.
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