Investment advisers, including certain registered investment advisers (RIAs) and exempt
reporting advisers (ERAs) (collectively, “Covered Institutions”) now face a significant regulatory deadline: by January 1, 2026, they must implement an anti-money laundering (AML) and countering the financing of terrorism (CFT) program in accordance with the
Financial Crimes Enforcement Network (FinCEN’s) Investment Adviser AML final rule.
This rule – published on August 28, 2024 – brings these Covered Institutions under the
definition of “financial institution” under the Bank Secrecy Act (BSA) and requires full implementation of a risk-based AML/CFT program. These Covered Institutions will also be subject to examination by the Securities and Exchange Commission, the Federal
functional regulator responsible for the oversight and enforcement of the IA industry.
FinCEN’s final rule is designed to help prevent sanctioned individuals, corrupt officials, tax evaders, and other criminal actors from investing in U.S. securities, real estate, and strategic investments to launder funds or finance illicit activities.
K2 Integrity’s team of subject matter experts is equipped and ready to support your firm in navigating FinCEN’s final rule requirements through the implementation deadline.
Implement a reasonably designed, risk-based AML/CFT program, to include:
File certain reports, specifically Suspicious Activity Reports (SARs) to FinCEN; Currency Transaction Reports (CTRs) for receipt of more than $10,000 in currency and certain negotiable instruments; and Foreign Bank and Financial Accounts (FBAR) reports.
Keep records such as those relating to the transmittal of funds (i.e., comply with the Recordkeeping and Travel Rules)
Apply information-sharing provisions between and among FinCEN, law enforcement, government agencies, and certain financial institutions (i.e., sections 314(a) and 314(b) of the USA PATRIOT Act).
Keep records such as those relating to the transmittal of funds (i.e., comply with the Recordkeeping and Travel Rules)
K2 Integrity supports IAs with assessing applicability of the final rule, exam readiness/gap assessments, and end-to-end design, development, and implementation of AML compliance programs in line with requirements issued by FinCEN and other regulators.
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