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The Department of the Treasury and the Financial Crimes Enforcement Network today issued three separate proposed rules under the USA Patriot Act that would expand anti-money laundering regulation to commodity trading advisors and securities investment advisers, as well as require suspicious activity reporting by futures commission merchants. The proposed rules would amend the Bank Secrecy Act (BSA) regulations as part of Treasury�s continuing implementation of the USA PATRIOT Act. Interested parties will have sixty days to comment on the proposed rules following their publication in the Federal Register, which is expected to occur later this week. These rules will serve as additional tools in the Administration�s continuing effort to fight illicit money laundering.
First, Treasury and FinCEN propose to require certain commodity trading advisors (CTAs), registered with the Commodity Futures Trading Commission (CFTC), to establish an anti-money laundering program pursuant to section 352 of the PATRIOT Act. The proposed rule covers those CTAs who have the authority to direct client commodity futures or options accounts. The regulation will not apply to CTAs who provide trading advice but do not manage client funds. The requirements of the proposed rule are similar to those for other financial institutions subject to section 352.
Treasury and FinCEN have also issued a proposed rule that would require securities investment advisers to establish an anti-money laundering program pursuant to section 352 of the PATRIOT Act. The proposed rule covers investment advisers registered with the Securities and Exchange Commission (SEC) as well as advisers that have $30 million or more of assets under management but are not required to register with the SEC under a statutory exception for investment advisers with fewer than 15 clients and who do not hold themselves out publicly as advisers. These unregistered advisors will also be required to file an annual notice with FinCEN identifying themselves. Like the rule for CTAs, the proposed rule only covers investment advisers that manage client funds.
Finally, Treasury and FinCEN issued a proposed rule that would require futures commission merchants and introducing brokers to file suspicious activity reports. Under a previous rule, these firms were required to develop anti-money laundering programs. In addition, the proposed rule would subject these firms to the general recordkeeping and reporting requirements of the BSA.