FMA warns Wellington financial services firm

UPDATED: MSL, a company associated with investor Duncan Saville, says it has systems in place to comply with AML legislation.

The Financial Markets Authority has issued a formal warning to MSL Capital Markets for failing to provide an audit report on its Anti-Money Laundering and Countering Financing of Terrorism risk assessment.

MSL failed to perform its audit and provide a copy of the audit report to the FMA by November 28, 2014, the regulator says in a statement.

It added that MSL has now taken action to undertake the audit and has committed to providing the FMA with a copy of the audit report.

MSL is 37% owned by Bermuda-based Eclectic Investment Company, a company of which investor Duncan Saville is a director and the ultimate beneficial owner.

Other MSL shareholders include Chaye Pettigrew and Justine Dunnett (25%), Craig Johnson (18.75%) and Ian Meredith Johnson (14.06%).

Its director is Andrew McDouall of McDouall Stuart.

A spokesman for MSL tells NBR ONLINE the late audit filing was the result of an oversight and the firm has acted quickly to comply.

"It's something we have to take on the chin and get the report to the FMA asap," he said.

The Anti-Money Laundering and Countering Financing of Terrorism Act (AML/CFT ) requires a reporting entity to ensure its risk assessment and AML/CFT programme are audited every two years or at any other time at the request of the relevant supervisor.

“Independent audits are an essential component of complying with the act and help ensure that reporting entities have, and will continue to have, robust systems and processes  to detect and deter money laundering and the financing of terrorism,” the FMA says.

FMA's warning comes after JPMorgan Chase Bank's New Zealand branch was given a formal warning by the Reserve Bank for a four-month period in 2013 when it didn't have appropriate risk assessment measures in place to meet the act. 

The central bank today issued a formal warning to the JPMorgan branch, saying it "has reasonable grounds to believe that for a period of approximately four months in 2013" the lender's risk assessment didn't fully meet all the requirements of the Anti-Money Laundering and Countering Financing of Terrorism Act, it said in a statement last week.

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