New Zealand FMA files proceedings against CLSAP NZ for anti-money laundering breaches

New Zealand Financial Markets Authority (FMA) filed proceedings in the civil High Court against CLSA Premium New Zealand Limited (CLSAP NZ) for breaches of the Anti-Money Laundering and Countering Financing of Terrorism (AML/CFT) Act.

Hong Kong subsidiary of CLSA Premium Limited, CLSAP NZ, formerly known as KVB Kunlun New Zealand Limited, provides financial services such as broking, financial advice and derivatives.

According to the New Zealand watchdog, CLSAP NZ failed to perform due diligence, terminate business relationships, report suspicious transactions and keep records in accordance with the AML/CFT Act.

The regulator also alleges that the breaches are representative of CLSAP NZ’s general approach to compliance with its AML/CFT obligations. The breaches occurred between April 2015 and November 2018 and involve transactions of nearly $NZ50 million.

The FMA has filed action against the company in High Court at Auckland and is seeking monetary penalty.

Nick Kynoch, FMA General Counsel, said:

Nick Kynoch, FMA

Nick Kynoch

The anti-money laundering legislation is a cornerstone to protecting the integrity of New Zealand’s financial system and it’s imperative that financial services firms ensure they are compliant. The regime has been in place since 2013 and CLSAP’s alleged breaches are serious so it is appropriate for the FMA to take a strong regulatory response. CLSAP NZ needs to be held to account and our approach sends an important message of deterrence to the industry.

The maximum penalty for CLSAP NZ could reach $2 million.

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