Tiger Brokers Is Being Prosecuted By The FMA For AML/CFT Violations

The New Zealand Financial Markets Authority (FMA) has launched a civil complaint against Tiger Brokers, a local subsidiary of the retail trading platform, for alleged violations of anti-money laundering and counter-terrorism funding legislation.

The financial market supervisor is seeking a monetary penalty of NZ$900,000 from Tiger Brokers (NZ) Limited, according to an official declaration made on Wednesday. If the claims are genuine, the court will determine the sum.

Tiger Brokers was accused of four AML/CFT rule breaches by the FMA. The trading platform failed to undertake customer due diligence on select customers, which included “standard, enhanced, and extended customer due diligence.” Furthermore, it did not sever commercial relationships with consumers for whom due diligence could not be performed.

“In our instance, Tiger Brokers is accused of failing to properly evaluate consumers, react to activity that should have aroused concerns, and keep records in accordance with the Act. All of these are essential requirements for an AML/CFT reporting business” According to Margot Gatland, the FMA's Head of Enforcement.

Tiger Brokers also neglected to disclose suspicious activity and maintain documents as required by local legislation. The FMA describes the company's record-keeping violations as “systemic and serious.”

“A failure to keep records as required by the AML/CFT Act severely hampers the FMA's ability to monitor compliance and ensure the regime is effective,” Gatland said, adding that “New Zealand-based AML/CFT reporting entities cannot outsource compliance obligations to third parties or rely on parent companies overseas unless they meet compliance obligations under New Zealand law.”

Tiger Brokers was subjected to regulatory action after the FMA issued a formal warning in March 2020 for failing to implement adequate anti-money laundering safeguards. Following the warning, the regulator initiated an inquiry on the broker.

“This case demonstrates that the FMA may react quickly to misbehavior with an intervention, such as a formal warning, but this may not be the end of the problem, and we may escalate the action if we believe it is appropriate in the circumstances,” Gatland said.

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