WASHINGTON (8/26/15)--Investment advisers would be required to establish anti-money laundering (AML) programs under a new proposed rule from the U.S. Treasury’s Financial Crimes Enforcement Network (FinCEN).
Introduced Tuesday, the proposal would also include investment advisers in the general definition of “financial institution,” which would require filing of Currency Transaction Reports and keeping fund transmission records.
According to FinCEN, the proposal would address money laundering vulnerabilities in the U.S. financial system, as bad actors may attempt to gain access through an investment adviser.
Requiring investment advisers to establish AML programs and file reports of suspicious activity would bring them under similar regulations as other financial institutions subject to the Bank Secrecy Act, such as mutual funds, broker-dealers in securities, financial institutions and insurance companies.
The proposal would apply to investment advisers that are required to be registered with the Securities and Exchange Commission (SEC), including advisers to certain hedge funds, private equity funds and other private funds. FinCEN would delegate its authority to examine investment advisers for compliance with these requirements to the SEC.
Written comments on this proposed rulemaking must be submitted on or before 60 days after its publication in the Federal Register.