The U.S. Department of the Treasury (“Treasury Department”) submitted its Semiannual Regulatory Agenda for review by The Office of Management and Budget (“OMB”) in April 2015. The semiannual regulatory agenda of the Treasury Department includes regulations that the Financial Crimes Enforcement Network (“FinCEN”) has issued or expects to issue and rules currently in effect that are under departmental or bureau review.
The most recent semiannual regulatory agenda filed included a rule proposal listed as Anti-Money Laundering Program and Suspicious Activity Report Filing Requirements for Investment Advisers. FinCEN noted that it was issuing the rule to prescribe minimum standards for anti-money laundering programs to be established by certain investment advisers and to require such investment advisers to report suspicious activity to FinCEN pursuant to the Bank Secrecy Act. Unlike the originally proposed AML rule, it is anticipated that under the current proposal, investment advisers would be required to file suspicious activity reports with respect to suspicious activities of advisory clients.
Because publication in the Federal Register is mandated for the regulatory flexibility agenda, the Treasury Department’s printed agenda entries include only rules that are in the regulatory flexibility agenda, because they are likely to have a significant economic impact on a substantial number of small entities, which may be an understatement for those advisers who have not voluntarily implemented AML programs.
In any event, since withdrawing the proposed AML rule for investment advisers in 2008, the Treasury Department has been contemplating re-proposing a rule to cover investment advisers and the proposed rule has been included in prior been submissions to the OMB; however, it appears that there is a strong possibility that 2015 could see the final role out of a new AML rule for advisers. This is based on the fact that the SEC staff and FinCEN have long stated that advisers, in general, have closer client relationships, and as a result, advisers have a greater chance of catching suspicious activity. Additionally, it was noted by the SEC at the IAA Compliance Conference in March 2015, that the SEC staff had been working with FinCEN on the proposed rule for some time.
At this time, it is anticipated that the review of the proposed rule by OMB could be completed by early August 2015, at which time the proposed rule would be posted for public comment in the Federal Register.