From January 1, 2026 registered investment advisers (RIAs) and exempt reporting advisers (ERAs) will be categorized as ‘financial institutions’ for the purposes of the Bank Secrecy Act (BSA). This change by the Financial Crimes Enforcement Network (FinCEN) will extend some Bank Secrecy Act BSA requirements to RIAs and some ERAs for anti-money laundering and countering terrorist financing (AML and CTF) purposes.

Key requirements are to:

• Establish AML/CFT programs, to include risk-based procedures for conducting ongoing customer due diligence (CDD); 

• Monitor for and report suspicious activity and file SARs and currency transaction reports (CTRs); 

• Maintain records of originator and beneficiary information for certain transactions (the Recordkeeping and Travel Rules); 

• Comply with new information-sharing provisions; and 

• Implement special due diligence requirements under the USA PATRIOT Act for certain types of accounts for non-U.S. financial institutions and non-U.S. persons. 

This also applies to non-U.S. investment advisers but only where their activities:

• Take place within the United States, including through the involvement of U.S. personnel of the investment adviser, such as the involvement of an agency, branch, or office within the United States; or 

• Provide services to a U.S. person (e.g., a U.S. feeder fund) or a non-U.S. private fund with one or more investors that is a U.S. person. 

There is also a joint FinCEN/SEC proposal for Customer Identification Programs for RIAs and ERAs and a further FinCEN proposal on AML/CFT programs for all in scope financial institutions. Their final rules are likely to be published in the new year. These will also need to be considered.

Please contact James Hopegood with any questions.

• 

  James Hopegood

  Director, Asset Management Regulation