Updated Effective Date and Reassessment of the IA AML Rule
On July 21, 2025, the U.S. Department of the Treasury (“Treasury Department”), through the Financial Crimes Enforcement Network (“FinCEN”), announced a two-year postponement of the effective date for the Anti-Money Laundering and Countering the Financing of Terrorism rule applicable to investment advisers (the “IA AML Rule”). Initially slated to take effect on January 1, 2026, the IA AML Rule is now scheduled to become effective on January 1, 2028.
In conjunction with the two-year postponement, FinCEN also confirmed its intention to reopen the IA AML Rule for further review and public comment. This renewed rulemaking effort is aimed at re-evaluating the rule’s scope and applicability in light of feedback from industry participants. Specifically, concerns have been raised regarding the costs and operational challenges associated with compliance, as well as the varying business models of registered investment advisers (“RIAs”) and exempt reporting advisers (“ERAs”).
The Treasury Department also announced it will work in coordination with the Securities and Exchange Commission (“SEC”) to reassess the proposed customer identification program (“CIP”) requirements applicable to investment advisers. This collaboration potentially reflects a broader regulatory reassessment of how AML obligations should be tailored to the advisory industry.
Background
As highlighted in The LeGaye Law Firm’s March 2025 article, “AML Compliance for Investment Advisers: Essential Steps to Meet the 2026 Deadline,” the IA AML Rule was finalized in September 2024. The rule, as originally adopted, would have required investment advisers to develop and implement comprehensive AML programs, including policies and procedures for customer due diligence, transaction monitoring, suspicious activity reporting, independent testing, employee training, and appropriate recordkeeping, all in accordance with the Bank Secrecy Act (“BSA”).
The article emphasized that advisers should determine whether they qualify as covered advisers under the rule, and provided a detailed framework for establishing risk-based AML procedures. With the effective date now postponed and the rule reopened for reconsideration, RIAs and ERAs have been granted temporary regulatory relief and additional time to prepare for their eventual compliance.
Recommended Action Items
In light of the postponement and ongoing regulatory review, investment advisers should:
- Refrain from implementing new AML programs at this time and continue to rely on the existing AML procedures maintained by their custodians;
- Monitor forthcoming guidance from both FinCEN and the SEC to stay informed of any updates or changes to the proposed rule; and
- Prepare to revise and adapt internal compliance programs once the final regulatory requirements are issued and clarified.
This delay also presents a strategic opportunity for investment advisers to engage in the formal comment process and contribute to the development of a more practical, risk-based regulatory framework that reflects the operational realities of the advisory industry.