The Autorité des marchés financiers (FMA) has issued a formal warning to the Sharesies share trading platform for non-compliance with anti-money laundering (AML) rules.
The FMA found that Sharesies had not determined the reasons why customers were using the platform, had not performed checks to see if any users needed to be given more due diligence, and had not checked the platform. identity of 7,815 customers who had an account balance of more than $ 1,000.
These are standard practices for financial services companies covered by the Anti-Money Laundering and Terrorist Financing Act (AML / CFT).
The issues were highlighted during a review of Sharesies’ processes by the FMA and there was no suggestion that the company was engaging in money laundering activities.
“We made this warning public because Sharesies’ tickets appeared to be symptomatic of a business that grew rapidly without ensuring that fully effective processes and controls were in place for the AML and CFT (against funding the terrorism), “said James Greig, director of supervision of the FMA. noted.
“The Sharesies tickets appeared to be symptomatic of a business that grew rapidly without ensuring that fully effective processes and controls were in place for the AML and CFT.”
Greig said he did not consider Sharesies’ violations to be willful.
The FMA ordered the stock trading platform to collect information from all clients in order to understand why they were using the platform, to develop processes to properly verify client identities and to perform checks on clients who may use Sharesies as a trust.
It is also necessary to restrict withdrawals on affected clients until all these checks are completed.
Sharesies President Alison Gerry said the company is taking the matter very seriously and has taken steps to address the issues.
These included asking specific questions of clients, using biometrics to substantiate client identities, and employing tighter controls on who acts as trusts, Gerry said.
“Sharesies does not currently endorse or encourage the use of the platform by trusts,” said Gerry.
It said the 7,815 customers who needed to have their identity verified represented 2% of its total user base.
“Sharesies has been in contact with all of these customers to establish a clearer link between them and their identity documents,” said Gerry.
“More than half of affected customers have now completed the identification process.”
No customer funds were put at risk, she said.