On August 25, 2015, the Treasury Department’s Financial Crimes Enforcement Network (“FinCEN”) released proposed anti-money laundering (“AML”) regulations that would require investment advisers registered or required to register with the SEC to have written AML programs meeting certain minimum requirements under the Bank Secrecy Act (the “BSA”).
The proposed regulations would require advisers to: (i) have written AML policies meeting the minimum requirements for internal AML controls, procedures, and supervision, employee training, and independent testing; (ii) file suspicious activity reports (“SARs”); and (iii) comply with certain recordkeeping and reporting rules. The FinCEN proposal includes a requirement that advisers obtain an independent audit of their AML programs and the filing of SARs. The proposed regulations would also subject advisers to recordkeeping, cash transaction reporting, and information-sharing obligations, and provide them with liability protections for certain disclosures and information-sharing in furtherance of AML law enforcement activities.
The regulations are expected to take effect six months following publication of the final version in the Federal Register and therefore will probably become mandatory by mid-2016.