FinCEN to Expand AML Requirements to Investment Advisers 

Earlier this month, the Financial Crimes Enforcement Network (FinCEN) acted to expand the covered entities under Bank Secrecy Act (BSA) regulations.  In a notice of proposed rulemaking published on September 1, 2015, the agency announced plans to extend BSA requirements, that currently apply to banks, broker-dealers, investment companies and mutual funds, to financial advisers registered with the Securities and Exchange Commission (SEC).  In a statement FinCEN Director Jennifer Shasky Calvery said, “Investment advisers are on the front lines of a multi-trillion dollar sector of our financial system. If a client is trying to move or stash dirty money, we need investment advisers to be vigilant in protecting the integrity of their sector.”

Under the proposed rules, financial advisers will be required to implement an anti-money laundering (AML) compliance program and file Suspicious Activity Reports (SARs).  Financial advisers would also be required to file Currency Transaction Report’s (CTRs). Unlike other covered entities that are regulated by FinCEN, the agency has proposed that the SEC enforce the new rules.  FinCEN has also declined to extend customer identification and verification requirements to financial advisers.  Industry stakeholders have until November 2, 2015 to comment.


FinCEN press release:

Notice of proposed rulemaking:


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