MR No. 2022 – 42
The Financial Markets Authority (FMA) - Te Mana Tātai Hokohoko has issued a formal warning to InvestNow Saving and Investment Service Limited for failing to comply with anti-money laundering requirements, including conducting customer due diligence, and having adequate and effective processes.
The FMA identified the issues with InvestNow through its routine monitoring for compliance with the Anti-Money Laundering and Countering Financing of Terrorism (AML/CFT) Act in November 2021 and June 2022.
In the FMA’s view, InvestNow failed to:
James Greig, FMA Director of Supervision said: “DIY investing platforms are at a higher risk of being targeted for money laundering or terrorist funding due to the highly liquid and digital nature of their businesses, which we outlined in our AML/CFT Sector Risk Assessment 2021. InvestNow failed to ensure it had the appropriate processes and controls to identify and respond to anomalies. Additionally, InvestNow was aware of its shortcomings but the company was slow to respond.
“We recognise the investment trading platforms in New Zealand have encouraged innovation and made trading more accessible. But fast-growing financial services firms must ensure their AML/CFT compliance function grows on par too, otherwise the benefits they bring will be tarnished by the potential for them to be used for illegal purposes; in turn harming New Zealand’s reputation.”
The FMA is requiring InvestNow to:
InvestNow must prepare a plan describing how and when it will complete these actions and submit it to the FMA by 31 October 2022. The company must also restrict withdrawals and transfers of financial products from customer accounts that require more information about their reasons for using the platform, identity verification, or further customer due diligence.
It is not alleged that InvestNow has allowed or enabled money laundering or the financing of terrorism to take place. The FMA also acknowledges InvestNow has taken steps to comply with the AML/CFT Act.
The warning was issued under section 80 of the AML/CFT Act, in which the FMA may issue a formal warning if there are reasonable grounds to believe a person has engaged in conduct that constitutes a civil liability act.
Download AML/CFT warning to InvestNow
FMA Media Relations Manager
021 220 6770
FMA Senior Adviser, Media Relations
021 945 323