FinCEN Proposes Anti-Money Laundering Regulation for Investment Advisers

September 22, 2015

The U.S. Department of the Treasury’s Financial Crimes Enforcement Network (FinCEN) issued a notice of proposed rulemaking on August 25, 2015, pertaining to all investment advisers registered or required to be registered with the Securities and Exchange Commission under the Investment Advisers Act of 1940, as amended (Advisers Act).

FinCEN’s proposed rules (Proposed Rules) would require such advisers to:

  • Establish anti-money laundering (AML) compliance programs;
  • Report suspicious activity to FinCEN pursuant to the Bank Secrecy Act (BSA); and
  • Comply with certain reporting and recordkeeping requirements under the BSA.

FinCEN proposes to delegate to the SEC the authority to examine such advisers for compliance with these requirements.

Over a decade earlier, FinCEN had proposed requiring the establishment of AML programs by unregistered investment companies and certain investment advisers (2003 Advisers Proposal), but these proposals were subsequently withdrawn.

This Dechert OnPoint describes FinCEN’s current proposed requirements and makes several observations against the backdrop of prior FinCEN proposals, explanations and guidance.

Read "FinCEN Proposes Anti-Money Laundering Regulation for Investment Advisers."