I refer to the recent advices from a stockbroker and comment on the Anti-Money Laundering & Counter-Terrorism Financing Act as requested in an attempt to clarify things (see email exchanges below).
The AML/CTF Act was introduced to regulate some fund-raising transactions. In relation to the issuing and buying/selling of shares it applies only to businesses which provide designated services covering:
- carrying on a business of buying and selling shares; and
- shares not issued for the company itself; and
- it is not an exempt financial operator issue.
Only a business satisfying all three criteria must comply with the AML/CTF Act regime, such as customer due diligence, identification, verification, record keeping and suspicious transactions reporting.
The Act specifically does not apply to a company issuing or facilitating trading in shares in itself, including new capital raising transactions.
So, it would appear from my investigations that the AML/CTF Act does not cover us as a manufacturing company making an occasional new share issue or allowing a share transfer to occur. Therefore, we do not have any obligation to check/report on the financial bona fides (source of funds used, etc) of the purchaser of shares in our company.
*Originally written by Company Secretary, an Australian virtual company secretary service.
