NZ regulator imposes additional license conditions on subsidiary of CLSA Premium
The additional specific conditions prevent CLSAP NZ from making an offer to, or receiving further funds from, retail investors in relation to derivatives, except in certain limited circumstances.
CLSA Premium Ltd (HKG:6877), formerly known as KVB Kunlun Financial Group Ltd, today confirmed that New Zealand’s Financial Markets Authority (FMA) will impose additional license conditions on its New Zealand subsidiary – CLSAP NZ.
The Company’s auditor could not complete the audit work for CLSAP NZ for the year ended December 31, 2019 due to denial of the auditor’s access to the evidence relating to the Group’s Legacy Systems and the data contained in the databases and servers maintained by Banclogix System Co., Limited.
On September 18, 2020, CLSAP NZ received a notice of decision from the FMA regarding the addition of specific conditions on its derivatives issuer licence under the Financial Markets Conduct Act (the “Act”) due to its failure to meet some of its audit and assurance obligations under the Act for year 2019. The additional specific conditions prevent CLSAP NZ from making an offer to, or receiving further funds from, retail investors in relation to derivatives, except in certain limited circumstances.
The conditions that the FMA has imposed, however, allow CLSAP NZ to close out open positions with retail investors, or receive funds from retail investors for the purposes of meeting obligations (e.g. margin or collateral requirements) that the investor might have with CLSAP NZ.
The above conditions will take effect from September 22, 2020 and will remain until such time as the relevant compliant audit and assurance reports for 2019 are lodged, and the FMA is satisfied that the criteria for issuing a licence under the Act are met.
The average business turnover of CLSAP NZ and the company’s subsidiary in Australia represented approximately 24.8% and 75.2% respectively of the Group’s average business turnover for the preceding three months.
Due to the additional licence conditions, the company’s business in New Zealand would be affected temporarily.