Fund managers can’t outsource AML
The FMA has written an open letter to managers of collective investment schemes (CIS), which are reporting entities under the Anti-Money Laundering and Countering Financing of Terrorism Act, which kicks in from June 30.
The regulator said there were several characteristics of CIS that might make them more vulnerable to money laundering.
These characteristics could include: Considerable amounts of funds under management; high net worth investors; the ability to invest by online or postal applications, or; “complexity and a lack of transparency in the manner that funds flow between parties in a CIS,” the FMA said.
“This vulnerability is compounded by fund administration (including registry services) often being outsourced. As a result, investors may have no face-to-face contact with the fund manager or an intermediary such as a financial adviser.”
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