Online investment supermarket InvestNow has had a formal warning from the Financial Markets Authority for failing to comply with anti-money laundering requirements, including conducting customer due diligence, and having adequate and effective processes.
The FMA identified the issues with InvestNow through its routine monitoring for compliance with the AML laws.
InvestNow has told customers that if they don't complete a recent AML request then they may not be able to make payments.
"We are now at the point where the FMA (our regulator) has told us we have to get this information from you before paying any withdrawals from your InvestNow account. Note that you will still be able to contribute and buy or sell funds," it told customers.
The FMA says InvestNow failed to:
“DIY investing platforms are at a higher risk of being targeted for money laundering or terrorist funding due to the highly liquid and digital nature of their businesses," FMA director of supervision James Greig said.
"InvestNow failed to ensure it had the appropriate processes and controls to identify and respond to anomalies. Additionally, InvestNow was aware of its shortcomings but the company was slow to respond."
“We recognise the investment trading platforms in New Zealand have encouraged innovation and made trading more accessible. But fast-growing financial services firms must ensure their AML/CFT compliance function grows on par too, otherwise the benefits they bring will be tarnished by the potential for them to be used for illegal purposes; in turn harming New Zealand’s reputation.”
The FMA has given InvestNow a list of things it needs to do to be compliant.
It is not alleged that InvestNow has allowed or enabled money laundering or the financing of terrorism to take place. The FMA also acknowledges InvestNow has taken steps to comply with the AML/CFT Act.
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