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FMA Sues CLSA Premium NZ

The Financial Markets Authority of New Zealand announced its filing of a civil High Court proceedings against CLSA Premium NZ Limited. This was for alleged breaches of the Anti-Money Laundering and Countering Financing of Terrorism Act.

The New Zealand operations of CLSA Premium was previously known as KVB Kunlun New Zealand Limited. This is their local subsidiary of the Hong Kong parent, CLSA Premium Limited. The company provides a range of financial services, including brokering, derivatives and financial advice.

FMA claims that CLSA Premium failed on several occasions to perform adequate due diligence and enhanced customer due diligence. This was according to a statement from the New Zealand regulator published on Tuesday.

The company also failed to terminate business relationships and report suspicious transactions. It then failed to keep records in accordance with the AML/CFT Act.

The NZ watchdog said the FMA claims that these alleged breaches are representative of CLSAP NZ’s general approach to compliance. That is with its obligations under the AML/CFT Act over the time that they occurred. The representative transactions involve nearly $50 million (NZ) and it occurred between April 2015 and November 2018.

Maximum penalty is $2 million for FMA Suit

The financial firm’s directors were Rongjun Zhang, Songyuan Huang, Stefan Liu, Robert Manwarring Noakes and Richard Clive Pearson. However, the directors are not parties to the proceedings.

Under the AML/CFT Act, the FMA seeks a pecuniary penalty against CLSA Premium New Zealand. This then includes costs in the High Court. For a company, the maximum pecuniary penalty for these alleged breaches is $2 million.

The anti-money laundering legislation is a cornerstone for protecting the integrity of the country’s financial system. Thus, it’s imperative that financial services firms are compliant. This was a statement from Nick Kynoch, FMA General Counsel.

Since 2013, this regime has been in place. CLSAP’s alleged breaches of it are serious. So it is appropriate for the FMA to take a strong regulatory response. CLSAP NZ needs to be held to account and their approach sends an important message of deterrence to the industry.

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