Pencarrow accepted responsibility for the record keeping breaches and co-operated with the watchdog. Photo: 123RF / Andrey Popov
The Financial Markets Authority (FMA) has issued a formal warning to an investment firm for failing to meet record-keeping requirements, under anti-money laundering and counter-terrorism financing law.
An investigation by the FMA found Pencarrow Private Equity Management had systemic failings in retaining identity and verification records for customers who invested in its Fund V, from April to July 2018.
The FMA said the records were not readily accessible.
It meant Pencarrow was unable to provide records to establish whether it had undertaken proper due diligence for six of the sampled customer files, the authority said.
Pencarrow accepted responsibility for the record-keeping breaches and co-operated with the watchdog.
The authority noted the risk of money laundering was low with the customers involved, but said Pencarrow failed to take its compliance obligations seriously at the time.
FMA head of enforcement Margot Gatland said robust and readily accessible records were essential for firms to meet anti-money laundering and counter-terrorism financing law.
"Firms need to continually monitor their customer base to identify any inconsistencies and report any suspicious activities," Gatland said.
"Good records also enable third parties such as auditors and supervisors to review an entity's compliance effectively and efficiently."
The FMA's warning requires Pencarrow to expedite its next audit relating to anti-money laundering and counter-terrorism financing, so it can be completed within four months of the warning.
The authority will also perform follow-up monitoring.