The Financial Supervisory Authority of Norway has published an inspection report on Frem Eiendomsmegling AS identifying shortcomings in the firm’s compliance with ICT requirements, the content of its enterprise risk assessment, client money handling, and anti-money laundering (AML) controls. The review also found repeated failures to ensure that sellers provided mandatory guarantees under the Home Construction Act in time. The findings include gaps in crisis preparedness testing under the ICT rules and omissions in the firm’s risk assessment, including risks of misleading information in sales processes and client money fraud attempts such as spoofing and phishing. The firm could not document that it had ensured client funds were placed at the highest possible interest rate through sufficiently robust market testing, and the Authority expected annual collection of bank offers. The inspection also identified inadequate follow-up of long-standing positive balances on client accounts, including cases where funds had remained for 18–19 years, which the Authority concluded breached the duty of care under the Real Estate Brokerage Act. In nine assignments, guarantees under the Home Construction Act were provided late without documentation that buyers were informed of the seller’s non-compliance and its consequences. On AML, the Authority found deficiencies in the firm’s business-wide risk assessment (including limited use of relevant external sources and missing consideration of terrorist financing) and in written procedures, including a lack of clear separation between enhanced customer due diligence and further investigations, and weaknesses in PEP checks, beneficial owner identification, identity verification, training planning, and internal control testing. Frem Eiendomsmegling reported that it has updated its risk assessments, AML procedures and internal control documentation, added clarifications (including PEP definitions) to engagement documents, and decided to increase the frequency of internal controls for certain brokers and case types for a period. The Authority asked the firm to send a copy of the letter to its auditor.
Norwegian Finanstilsynet 2025-05-14
Financial Supervisory Authority of Norway finds ICT, client money and anti-money laundering weaknesses at Frem Eiendomsmegling
Norway's Financial Supervisory Authority found Frem Eiendomsmegling AS lacking in ICT compliance, risk assessment, client money handling, and AML controls. The firm failed to ensure timely guarantees under the Home Construction Act and had inadequate crisis preparedness and fraud prevention. Frem Eiendomsmegling has updated its risk assessments and AML procedures, and the Authority requested the firm to inform its auditor.