AML Regulations and Digital Advice Notice Amended

On 24 June 2019:

  • The Anti-Money Laundering and Countering Financing of Terrorism (Definitions) Amendment Regulations 2019 (AML Amendment Regulations) were made. They can be found here.
  • The Financial Advisers (Personalised Digital Advice) Exemption Amendment Notice (No 3) 2019 (Digital Advice Amendment) was given by the Financial Markets Authority. It can be found here.

Who needs to read it? Why?

The AML Amendment Regulations, which are due to come into force on 1 August 2019, provide further detail about the incoming high-value dealer provisions, and will be of interest to anyone that will either deal in those types of transactions or participate in them as a customer.

The Digital Advice Amendment, while specific to one entity, does indicate that the number of entities permitted to offer digital advice will continue rising, as well as setting out the reasons for allowing it in this case. These reasons would be of value to anyone who may consider seeking such a permission to offer digital advice in the future.

What does it cover?

High-value dealers, being persons who in trade and the ordinary course of business buy or sell particular articles at or above a total threshold of value, were already due to become reporting entities on 1 August 2019. The AML Amendment Regulations will set the relevant threshold at $10,000. They will also specifically exclude registered auctioneers, who would otherwise fall within the definition of high-value dealers, from being reporting entities except where they provide real estate agency work, carry out certain activities or are a reporting entity for reasons other than their being a registered auctioneer.

The Digital Advice Amendment makes the single change of adding another entity (namely Pinnacle Life Limited) to the list under the Financial Advisers (Personalised Digital Advice) Exemption Notice 2018 of those permitted to provide personalised services to retail clients through a digital advice facility. The reasons stated for this are that providing them with this exemption would align with the purposes of the Financial Advisers Act 2008, and that the compliance costs they would bear to have those personalised services provided to retail clients by human advisers would be unreasonable and not justified by the benefit that compliance there would bring.

If you have any questions in relation to either of these matters, or are considering what these changes could mean for your business, please contact one of our experts.

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