Treasury Releases AML Rule for Advisors

Advisors would also be required to file suspicious activity reports, fulfill certain recordkeeping requirements, and fulfill other obligations applicable to financial institutions subject to the BSA and FinCEN’s implementing regulations.

The proposed rule would also apply information-sharing provisions between and among FinCEN, law enforcement government agencies, and certain financial institutions, along with special measures that have been applied under Section 311 of the USA PATRIOT Act.

Comments will be accepted until April 15.

Treasury also published Tuesday its risk assessment of investment advisors, “which identifies illicit finance threats and vulnerabilities in the sector, including how the uneven application of AML/CFT requirements across the sector allows both legitimate and illicit investors to ‘shop around’ for an adviser who does not need to inquire into their source of wealth.”

Investment advisors “are important gatekeepers to the American economy, overseeing the investment of tens of trillions of dollars,” FinCEN Director Andrea Gacki said Tuesday in a statement.

“The current patchwork of AML/CFT requirements creates regulatory gaps that criminals and foreign adversaries exploit to launder money, hide illicit wealth, and compromise American innovation. This proposed rule would level the regulatory playing field, protect U.S. economic and national security, and safeguard American businesses,” Gacki said.