05.13.24

SEC, Treasury Propose Added Anti-Money Laundering Requirements for Advisors

by: Brian Croce

The U.S. Securities and Exchange Commission (SEC) and Treasury Department issued a proposal aimed at preventing money laundering that would require registered investment advisors (RIAs) to establish, document and maintain written customer identification programs. The proposed rule would require advisors to, among other things, implement a customer identification program that includes procedures for “verifying the identity of each customer to the extent reasonable and practicable,” according to a fact sheet from the SEC and Treasury’s Financial Crimes Enforcement Network (FinCEN). The advisors would also have to maintain records of the information used to verify a customer’s identity, including name, address and other identifying information. This proposal complements a separate FinCEN proposal in February to designate RIAs and exempt reporting advisors as “financial institutions” under the Bank Secrecy Act.

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