Investment advisers and private funds have largely not been under the strict regulatory requirements under Bank Secrecy Act. The rationale is that the custody requirements impose a custody account and the custodian is subject to those rules.
It looks like things are going to change. U.S. Treasury Undersecretary for Terrorism and Financial Intelligence David Cohen gave speech to to the ABA/ABA Money Laundering Enforcement Conference and said changes are underway.
FinCEN, in consultation with the SEC, is working to define SEC-registered investment advisers as financial institutions and, because of their unique insight into customer and transaction information, to extend AML program and suspicious activity reporting requirements to them.
In 2012, the Federal Reserve, FDIC, OCC, NCUA, SEC, CFTC, IRS, and DOJ, formed an AML Task Force to review the AML regime. The Task Force’s mandate was to take a close look at what was working well and what areas might need some improvement, leveraging input from the private sector through the Bank Secrecy Act Advisory Group.
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