FinCEN Proposed AML Rule for Investment Advisers

August 26, 2015

It has been over 10 years in the making, but FinCEN has re-proposed an AML rule for SEC-registered advisers. As proposed, advisers would be required to:

  1. Establish an AML program that is approved in writing by the adviser’s board of directors or persons with similar function (i.e., proprietor(s) or a general partner),
  2. Adopt AML policies and procedures,
  3. Conduct independent testing,
  4. Designate an AML officer,
  5. Provide ongoing training to appropriate personnel, and
  6. File Suspicious Activity Reports and Currency Transaction Reports for cash transactions over $10,000.

The proposed rule does not require advisers to establish a customer identification program (“CIP”), which is typically required for banks, broker-dealers, and other financial institutions. FinCEN indicated that CIP requirements, as well as the applicability of other sections of the Patriot Act, would be addressed via additional rulemaking.

FinCEN’s announcement can be found here and the rule proposal here. Comments on the rule are due 60 days after the proposal’s publication in the Federal Register.

If you have questions about the proposed rule, please contact Nick Prokos or your ACA consultant.