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8/25/16 - Investment Advisers May Soon Face New AML Requirements

Investment advisers registered with the Securities and Exchange Commission may soon need to conduct the kind of customer and account monitoring long demanded of banks, broker-dealers, and mutual funds. The Financial Crimes Enforcement Network is considering a final rule requiring SEC-registered investment advisers to establish risk-based anti-money-laundering programs and report suspicious account activity to FinCEN under the Bank Secrecy Act.

FinCEN would delegate examination authority to the SEC, which has levied multimillion-dollar fines against broker-dealers over inadequate customer monitoring and failure to report suspicious activity — penalties that show the seriousness with which the commission takes AML lapses at firms it oversees. Please click below to read a Sightlines InFocus by Conway Dodge and Peter Bass, “Investment Advisers May Soon Face New AML Requirements,” which recommends that advisers conduct initial risk assessments to gauge the strength of existing controls and help establish effective AML programs.

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