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Financial Crimes Enforcement Network Proposes New AML/CFT Rule

Feb 20, 2024

On February 13, 2024, the Financial Crimes Enforcement Network (“FinCEN”) proposed the Anti-Money Laundering/Countering the Financing of Terrorism Program and Suspicious Activities Report (“SARs”) Filing Requirements for Registered Investment Advisers (“RIAs”) and Exempt Reporting Advisors (“ERAs”)(together, “advisers”)(“AML/CFT”) under the Bank Secrecy Act (“BSA”). 

According to the AML/CFT, RIAs and ERAs would be required to: 

  • Implement a risk-based AML/CFT program;
  • File SARs with FinCEN, and
  • Fulfill recordkeeping requirements.

How the proposed rule seeks to address current exposures 

Advisers overseeing trillions of dollars in the U.S. securities market currently lack dedicated anti-money laundering oversight designed to specifically combat money laundering, terrorist financing and other illicit financial activities. This gap exposes them to misuse by bad actors. To address this, FinCEN has proposed the AML/CFT to stop bad actors from using advisers as means of entry into the U.S. securities market to money launder and finance terrorism. 

If adopted, RIAs and ERAs bound to the rule would be required to implement a risk-based and reasonably designed AML/CFT compliance program. Advisers would be required to comply with the rule 12 months from the effective date of the rule. Such program is expected to include:

  • A designated compliance officer
  • Policies and procedures
  • Training and education
  • Recordkeeping

Comment period timeline for the AML/CFT rule 

The proposed rule delegates FinCEN’s examination authority of advisers to the SEC. During examinations, the SEC will examine advisers for compliance with the AML/CFT. The comment period for the proposed rule is open until April 15, 2024. 

EisnerAmper will track the public’s comments and stay tuned for a follow-up article on the outcome of the proposed rule that will be posted on EisnerAmper's Compliance Desk

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TaNeka Ray

TaNeka Ray is a Senior Manager in the firm's Global Compliance & Regulatory Solutions Group & and has over 5 years of experience.

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