Under the AML legislation, reporting entities must file their first annual return by the end of August.

For many, it is the first time they are being held to account for their AML processes. Since the middle of last year, reporting entities have had to have a risk assessment and management process in place. But it has been estimated up to 10% do not and more may not realise that they are reporting entities.

The return asks them to explain the processes the business has in place.

FMA spokesman Andrew Park said the number of returns being submitted was increasing every day.

Yesterday, he said about 500 had been completed in the past 24 hours.

The FMA estimates that there are between 500 and 600 adviser reporting entities, although it will not have a clear picture of exactly how many there are until all the returns are filed.

At the end of last week, 130 had been completed.

Richard Manthel, of AML Solutions said the report would make it very clear to the regulator if a reporting entity had not completed its risk assessment and did not have an AML programme in place.  He estimated that between 10% and 15% of financial advisers were not already compliant with the AML rules.
More may not realise they were reporting entities, he said.  But ignorance would be no excuse. “Don’t wait until the last minute, show proactivity. If there is any issue, it’s better to find out earlier.  A lot of companies are still a long way from being compliant but AML is a serious issue. Saying you’ve never heard of it, or you’re not aware, is no defence.”
Park said the FMA expected to have all AML returns completed on time.