NZ regulator seeks $900,000 fine against Tiger Brokers for AML/CFT breaches
“This case shows the FMA can respond to misconduct promptly with an intervention, such as a formal warning, but this may not be the end of the matter and we may escalate the response if we consider it appropriate to do so in the circumstances.”
The Financial Markets Authority (FMA) has filed charges against Tiger Brokers (NZ) Limited for allegedly breaching the Anti-Money Laundering and Countering Financing of Terrorism (AML/CFT) Act 2009.
The New Zealand regulator will seek a pecuniary penalty of $900,000.
According to the regulator, Tiger Brokers failed to:
- conduct customer due diligence (including standard, enhanced and additional customer due diligence on certain clients);
- terminate an existing business relationship with any customer in respect of whom it was unable to conduct customer due diligence;
- report suspicious activities; and
- keep records in accordance with the Act’s requirements.
Tiger Brokers’ non-compliance warrants strong enforcement action
Charges against Tiger Brokers follow a formal warning from the FMA in March 2020 for the broker’s AML/CFT failures at the time. After that, the financial watchdog opened an investigation into Tiger Brokers’ compliance, including obtaining a sample of customer files and other documents required for record-keeping.
The FMA concluded the extent of Tiger Brokers’ non-compliance warrants strong enforcement action in the form of civil pecuniary penalty proceedings.
The broker’s record-keeping breaches are systemic and significant as they are not confined to the sample of customer files and records were not readily accessible and readily convertible into English, the regulator alleges.
Failure to appropriately vet customers, address issues and maintain records
Margot Gatland, FMA Head of Enforcement, said: “The anti-money laundering and counter financing of terrorism regime is an important pillar to maintaining the integrity of New Zealand’s financial markets, so we take non-compliance seriously. Our case alleges Tiger Brokers failed to appropriately vet customers, respond to activities that should have raised concerns, and maintain records in the manner required by the Act. These are all core obligations for an AML/CFT-reporting entity.
“A failure to keep records as required by the AML/CFT Act severely hampers the FMA’s ability to monitor compliance and ensure the regime is effective. New Zealand-based AML/CFT reporting entities cannot outsource compliance obligations to third parties or rely on parent companies overseas without ensuring that they meet compliance obligations under New Zealand law.
“This case shows the FMA can respond to misconduct promptly with an intervention, such as a formal warning, but this may not be the end of the matter and we may escalate the response if we consider it appropriate to do so in the circumstances.”
Tiger Brokers is the New Zealand-based subsidiary of Tiger Fintech (Singapore) PTE Limited and provides share brokering services through an online trading platform, Tiger Trade
