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Stories of Interest
- Sarah ten Siethoff is New Associate Director of SEC Investment Management Rulemaking Office
- Catherine Keating Appointed CEO of BNY Mellon Wealth Management
- Credit Suisse to Pay $47Mn to Resolve DOJ Asia Probe
- SEC Chair Clayton Goes 'Hat in Hand' Before Congress on 2019 Budget Request
- SEC's Opening Remarks to the Elder Justice Coordinating Council
- Massachusetts Jury Convicts CA Attorney of Securities Fraud
- Deutsche Bank Says 3 Senior Investment Bankers to Leave Firm
- World’s Biggest Hedge Fund Reportedly ‘Bearish On Financial Assets’
- SEC Fines Constant Contact, Popular Email Marketer, for Overstating Subscriber Numbers
- SocGen Agrees to Pay $1.3 Billion to End Libya, Libor Probes
- Cryptocurrency Exchange Bitfinex Briefly Halts Trading After Cyber Attack
- SEC Names Valerie Szczepanik Senior Advisor for Digital Assets and Innovation
- SEC Modernizes Delivery of Fund Reports, Seeks Public Feedback on Improving Fund Disclosure
- NYSE Says SEC Plan to Limit Exchange Rebates Would Hurt Investors
- Deutsche Bank faces another challenge with Fed stress test
- Former JPMorgan Broker Files racial discrimination suit against company
- $3.3Mn Winning Bid for Lunch with Warren Buffett
- Julie Erhardt is SEC's New Acting Chief Risk Officer
- Chyhe Becker is SEC's New Acting Chief Economist, Acting Director of Economic and Risk Analysis Division
- Getting a Handle on Virtual Currencies - FINRA
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NEWSLETTERS & ALERTS
Rules & Regulations
AML for RIA’s – A View From the (Other) Bridge
[Photo: by M.V. Jantzen / Flickr]
No sooner did we conclude that SEC-registered investment advisors (RIAs) will likely get a pass from having to implement a money laundering program, than we are advised to the contrary by, of all people, Nick Morgan and Art Zwickel of Paul Hastings, from whom we quoted in the earlier article. [Click on: What’s Happening with the Proposed AML Requirements for RIA’s].
Go figure. But all seriousness aside, Financialish appreciates the opportunity to consider opposing viewpoints.
AML experts now believe that the Treasury Department’s Financial Crimes Enforcement Network, or FinCEN, is moving ahead with its long awaited proposed money laundering rule, which has languished in Washington since August 2015, and is likely to become the law. Even in the current deregulatory environment of the Republican White House and Congress.
HOW’S THAT POSSIBLE? Without trying to ferret out the reasons for the rule’s nearly 2-year delay, the current regulatory does not necessarily pertain to matters involving emergency situations and national security. Which would mean that any rules that deal with money laundering and anti-terrorist financing would be exempt from the rule freeze or deregulation.
This position is confirmed by Stephanie Brooker with Gibson Dunn, who previously served was Enforcement Director with FinCen. Ms. Brooker said: “I think the view of most people in the bank secrecy-AML community is that this area of the law is perhaps less likely to be subject to deregulation in the new administration, given that it does focus on money laundering and anti-terrorist financing.” And she added: “We continue to advise clients at my firm that having a good overall know-your-customer AML program ... is a good idea.”
Eric Kringel, the Bank Secrecy Act specialist at the SEC Enforcement, agrees that the rule is likely to materialize, in part because of the Trump administration’s emphasis on combating terrorism, but also because it appears to be nearing the end of a long development process.
Under FinCEN’s proposed rule, the SEC would assume responsibility for examining advisers’ AML programs, which I no small assignment, given the agency’s already tight schedule, reduced budget, and Commissioner vacancies. That said, the true burden of responsibility would fall on investment advisers registered with the SEC. Banks, broker-dealers, mutual funds and insurance companies already are subject to the rules.