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The legal industry has received its first formal warning for failing to meet AML obligations. The action comes within weeks of the real estate industry suffering the same fate.

Since the new financial advice regime came into play on 15 March, licensed and unlicensed financial advice providers (FAPs) undertaking ‘captured activities’ are considered to be reporting entities under the AML/CFT Act.

The Financial Intelligence Unit (FIU) recently released its February 2021 Suspicious Activity Report (SAR). This update provides a snapshot of New Zealand’s most common suspicious activity report categories.

Reporting entities that are also financial advice providers (FAPs) must be able to confirm to the regulator, professional indemnity insurers and product providers that they are compliant with the relevant requirements of the new financial advice regime.

Clever use of mobile phones as a tool in the advice process can not only improve efficiency, but save Financial Advice Providers (FAPs) thousands of dollars every year.

Standard nine of the Code of Professional Conduct for Financial Advice Services requires FAPs, financial advisers and nominated representatives to keep competence, knowledge, and skill up-to-date. This means you need to have undertaken some form of training to ensure you know all the new obligations that have to be met regarding disclosure, duties obligations, Financial Service Providers Register changes, dispute resolution scheme changes, Privacy Act, Financial Markets Conduct Act, Trusts Act 2019 and the list goes on.

A transitionally licensed FAP has only two years to get its full FAP licence. With over 1800 transitionally licensed FAPs in existence, the Financial Markets Authority will have its hands full processing these applications. There is a very real danger that some firms will miss the cut-off, especially if they leave application to the last six months.

The Financial Action Task Force (FATF) has released its latest assessment of New Zealand’s anti-money laundering and countering financing of terrorism (AML/CFT) system, highlighting several priority areas for action.

Two-thirds of the AML/CFT assessments carried out by the Department of Internal Affairs identified reporting entities as being non-compliant and requiring some form of remediation, the Department’s latest AML/CFT Regulatory Findings Report has revealed.

The Department of Internal Affairs (DIA) is moving to more targeted compliance assessments to test reporting entities’ understanding and implementation of various areas of their AML obligations – starting with politically exposed persons (PEPs).