Wellington, Sept 26 NZPA - Direct Broking has been fined $25,000 by the New Zealand Stock Exchange (NZX) for breaching client relationship rules.
Direct Broking bought the client base of the failed Access Brokerage in September 2004.
In April this year the NZX discovered the brokerage was not complying with
its obligations under the exhange's "Know Your Client" rules in respect to the former Access customers.
NZX found a number of breaches took place between January and April this year, when Direct Broking conducted a "substantial number of trades" on behalf of former Access clients without first entering a client agreement and obtaining all the necessary evidence of identity.
Direct Broking had cooperated with the NZX throughout the investigation and immediately suspended all non-compliant accounts.
It did not dispute the breach and undertook "significant work" to rectify the situation, the NZX said.
"No client was put at risk as a result of these breaches and, because of the settlement procedures adopted in respect of the non-compliant client accounts, any risk to the market such as money laundering was also negligible," NZX said.
In addition to the fine, Direct Broking has agreed to undertake an independent review of its client procedures.
- NZPA
