SICAV fund fined over 'millions invested without robust controls'

Maltese investment fund Southern Cross SICAV was fined €303,710 over "failures" in its anti-money laundering obligations, the island's Financial Intelligence Analysis Unit (FIAU) said in a public notice issued on 5 January.

The FIAU, which has been operating since 1 October 2002, is the national central agency in Malta that is responsible for the collection, collation, processing, analysis and dissemination of information to combat money laundering and the funding of terrorism.

Although the fund was in the process of surrendering its MFSA licence, the FIAU issued the fine over Southern Cross Sicav's "lack of regard" towards its anti-money laundering obligations which it said could have had an impact not only on its own operations, but also had repercussions on Malta.

The FIAU found Southern Cross failed to adequately document its internal procedures to fight money laundering and did not properly screen its customers before accepting their money.

It said: "In determining the administrative penalty, the Committee also considered that the Company had started the process of surrendering its Collective Investment Scheme License with the MFSA. If this process had not been initiated, a follow up directive would have been initiated by the Committee.

"Furthermore, due consideration was given to the nature of the services and products offered by the Company and the size of its business operations, including the closure of its business.

It added: "The Committee also considered the fact that the requirements breached are important obligations and that the failures are serious in nature, given that the Company was servicing professional investors, therefore allowing millions to be invested through the SICAV, without robust controls in place.

"The Company's lack of regard towards its AML/CFT obligations, could have had an impact not only on its own operations but also had repercussions towards the local jurisdiction."

To read the full details in the notice, click here.