Sharesies strengthens AML/CFT compliance

Following a routine review in February, the FMA has today issued a public warning to Sharesies in relation to some of its anti-money laundering and countering financing of terrorism (AML/CFT) practices.

Sharesies Chair, Alison Gerry, says this matter is being taken very seriously.

“I want to be clear that the FMA has not found evidence that any money laundering has taken place,'' she says. “What the FMA has identified is ways in which we need to strengthen our customer identification practice.”

“As soon as we became aware of the concerns raised, we immediately put in place a work programme to address each of the issues outlined.”

“These include:

• Asking specific questions about the nature and purpose for which a customer plans to use the Sharesies platform.
• Tighter controls to identify if customers are trying to use Sharesies as a trust and implementing enhanced due diligence where this has occurred.
• Improving our identification linking, including using biometrics as one of the ways to verify customer identity.”

Changes implemented

At the FMA’s request, Sharesies now includes specific questions about the nature and purpose for which a customer plans to use the Sharesies platform, rather than relying on a statement in the terms agreed by the customer.

The company has completed enhanced due diligence on a very small number of customers which have since been identified as a trust. Sharesies does not currently support or encourage use of the platform by trusts.

The issues raised by the FMA include how Sharesies linked some customers to the different forms of identification that they provided when signing up. The number of customer accounts highlighted as needing stronger identity linking was up to 7,815. The total represents under 2 percent of the Sharesies customer base.

“Sharesies has been in contact with all of these customers to establish a clearer link between them and their identity documentation,“ says Alison Gerry. “More than half of the relevant customers have now completed the identification process.”

Alison Gerry says at no point have any customer funds been at risk.

Sharesies takes compliance seriously

Since its establishment in 2017, Sharesies has undertaken independent AML/CFT audits as per its obligations to ensure processes meet best practice. The latest audit identified areas for improvement, but considered these were not material. Sharesies has always and will continue to work with regulators to understand and meet its legal obligations.

“While Sharesies has seen rapid growth over the last year, we have consistently invested in our compliance function over the years, in terms of both technology and human resources,” says Alison Gerry.

“The changes we’re making should provide more assurance that we are demonstrating best practice. '' she says. “Our purpose as a business is to make investing accessible to everyone and we know that to do this there needs to be a process of constant improvement.”

About Sharesies:

Sharesies is an online investment platform that seeks to provide an inclusive, low-cost way to invest in New Zealand, Australia and the US. The platform gives investors access to more than 6,000+ companies and funds with no minimum investment amount. Since launching in 2017, Sharesies has amassed 400,000+ investors with more than $1.5B funds under management. Sharesies is one of the first New Zealand financial services companies to become a Certified B Corporation®.

https://www.sharesies.nz/

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