What You Have to Know
- Beneath the plan, SEC-registered advisors must set up, doc and keep written buyer identification packages.
- It could make it tougher to make use of false identities to determine buyer relationships with advisors, SEC’s Gensler says.
- The plan enhances FinCEN’s anti-money laundering rule for funding advisors, launched in February.
The Securities and Alternate Fee and the Treasury Division’s Monetary Crimes Enforcement Community (FinCEN) collectively proposed Monday a brand new rule that might require SEC-registered funding advisors to determine, doc and keep written buyer identification packages.
The proposal, in keeping with the companies, “is designed to stop illicit finance exercise involving the shoppers of funding advisers by strengthening the anti-money laundering and countering the financing of terrorism (AML/CFT) framework” for the funding advisor sector.
“The proposed rule is designed to make it tougher to make use of false identities to determine buyer relationships with funding advisers,” stated SEC Chairman Gary Gensler in a press release. “I assist this proposal as a result of it might cut back the chance of terrorists and different criminals accessing U.S. monetary markets to launder cash, finance terrorism, or transfer funds for different illicit functions.”
The plan enhances FinCEN’s long-awaited anti-money laundering rule for funding advisors, launched in February, which might designate RIAs and exempt reporting advisors as “monetary establishments” beneath the Financial institution Secrecy Act and topic them to AML/CFT program necessities and suspicious exercise report (SAR) submitting obligations.
Beneath the brand new proposal, RIAs and ERAs could be required to implement affordable procedures to establish and confirm the id of their prospects, amongst different necessities.
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