NZ regulator files court proceedings against Tiger Brokers
New Zealand’s Financial Markets Authority (FMA) has filed civil High Court proceedings against Tiger Brokers (NZ) Limited for allegedly breaching the Anti-Money Laundering and Countering Financing of Terrorism (AML/CFT) Act 2009.
The FMA case alleges four causes of action, relating to Tiger Brokers:
- Failing to conduct customer due diligence (including standard, enhanced and additional customer due diligence on certain clients);
- Failing to terminate an existing business relationship with any customer in respect of whom it was unable to conduct customer due diligence;
- Failing to report suspicious activities; and
- Failing to keep records in accordance with the Act’s requirements.
The matter will proceed to a penalty hearing before the High Court where the parties will jointly submit that Tiger Brokers should be ordered to pay a pecuniary penalty of $900,000. The amount of any pecuniary penalty will be determined by the Court.
The proceedings follow the FMA issuing a formal warning to Tiger Brokers in March 2020 for failing to have several adequate AML/CFT protections in place.
After issuing the warning, the FMA opened an investigation into Tiger Brokers’ compliance with the Act, 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 FMA considers Tiger Brokers’ record-keeping breaches are systemic and significant as they are not confined to the sample of customer files. The FMA alleges that Tiger Brokers’ records were not readily accessible and readily convertible into English (as required by the Act).
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.
The FMA’s case relates to Tiger Brokers’ AML/CFT policies, processes, controls and obligation to file suspicious activity reports. It does not allege that Tiger Brokers has allowed money laundering or financing of terrorism to take place.