Insights & News

Seeing SARs: FinCEN Proposes Bruising AML Rules for Investment Advisers

February 22, 2024
Client Alert

The Financial Crimes Enforcement Network (FinCEN), a bureau of the U.S. Department of the Treasury, proposed new anti-money laundering and countering the financing of terrorism (AML/CFT) regulations on February 13 that would create and expand certain obligations of registered investment advisers (RIAs) and exempt reporting advisers (ERAs) under the Bank Secrecy Act (BSA). If the proposed rule is adopted, RIAs and ERAs would be required to develop and implement an AML/CFT program, file suspicious activity reports (SARs) and currency transaction reports (CTRs), and meet certain recordkeeping and other requirements.

Key Takeaways

  • FinCEN’s proposed rule would apply to ERAs as well as RIAs (but not to state-registered advisers). This could have a significant impact on non-U.S. advisers.
  • The proposed rule does not address how the requirements would apply to
    sub-advisory activities.
  • Advisers to mutual funds and open-end exchange-traded funds (ETFs) would be exempt from the AML/CFT and SARs requirements.
  • The proposed rule would not require a customer identification program or collection of beneficial ownership information … yet.
  • The proposed rule would delegate examination authority related to oversight of compliance with the rule to the U.S. Securities and Exchange Commission (SEC) (similar to funds and broker-dealers)

Read full article here.

Information contained in this publication should not be construed as legal advice or opinion or as a substitute for the advice of counsel. The articles by these authors may have first appeared in other publications. The content provided is for educational and informational purposes for the use of clients and others who may be interested in the subject matter. We recommend that readers seek specific advice from counsel about particular matters of interest.

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