Dec 18 2015

Anti-money laundering (AML) requirements for Investment Advisers – what you need to know

The United States Treasury, through its Financial Crimes Enforcement Network (FinCEN) has gone beyond publishing its notice of proposed rulemaking by imposing the Anti-money laundering (AML) requirements to both the opening and closing of the comment period, moving closer to implementation.

When adopted, covered registered investment advisers (RIA’s) will be required to:

  • File currency Transaction Reports (CTR’s) and maintain detailed records of the transmittal;
  • Implement and AML program crafted for their particular use;
  • File Suspicious Activity Reports(SAR’s), where applicable; and
  • Become subject to the Bank Secrecy Act (BSA) and portions of the Patriot Act.

One thing is clear, RIAs need to start their compliance preparations now. Having a joint discussion about the FinCEN rulemaking with your leadership team and an information security expert is the best way to begin addressing these requirements. Initially, RIAs must work with their information technology departments to develop automation and possible outsourcing of some of these requirements. Next, preparations should include working with legal counsel who can help incorporate the fundamentals of this proposed rule into the RIA’s corporate structure. It’s time to consider the rule’s effect on budgets for 2016 and beyond, as the corporate governance requires that the AML program be approved in writing by the board of directors, trustees, or similar functioning body of the RIA.

For more information, visit Pepper Hamilton’s article about the FinCEN rulemaking at

As always, feel free to reach out to me via our address if you’d like to learn more about this topic and other corporate governance and legal matters relating to information security.