Background
The Financial Markets Authority (FMA) has issued a formal warning to Sharesies Limited and Sharesies Nominee Limited for failures in their anti‑money laundering and countering financing of terrorism (AML/CFT) compliance frameworks. The issues were identified through the FMA’s ongoing monitoring of compliance with the AML/CFT Act.
The FMA determined that Sharesies did not have sufficient AML/CFT procedures, policies, and controls in place. Key deficiencies included failures to adequately understand the nature and purpose of customer relationships, insufficient information to determine when enhanced customer due diligence (EDD) was required, and incomplete identity verification for up to 7,815 customers with account balances exceeding $1,000.
To address these shortcomings, the FMA has required Sharesies to implement a series of remedial actions. These include collecting additional information from all existing customers regarding their reasons for using the platform, strengthening onboarding processes, completing identity verification at the time of account application, enhancing staff training, and conducting EDD for customers identified as trusts. Sharesies must also restrict withdrawals or transfers for customers whose identity verification has not been completed.
The FMA emphasised that these requirements reflect standard AML/CFT practices for reporting entities. Importantly, the regulator stated that it is not alleged that Sharesies enabled or facilitated money laundering or terrorism financing.
The warning was issued under section 80 of the AML/CFT Act, which allows the FMA to take action where there are reasonable grounds to believe a firm has engaged in conduct constituting a civil liability act. The formal warning underscores the regulator’s expectation that reporting entities maintain robust and fully implemented AML/CFT controls, particularly in customer due diligence and identity verification processes.
