Executive Summary
The Financial Crimes Enforcement Network (FinCEN) notice of proposed rulemaking (NPRM) on categorising registered investment advisers (RIAs) and exempt reporting advisers (ERAs) as ‘financial institutions’ for the purposes of the Bank Secrecy Act (BSA). The proposal would extend some Bank Secrecy Act BSA requirements to RIAs and some ERAs for anti-money laundering and countering terrorist financing (AML and CTF) purposes.
However, the way the NPRM is structured does not appear to take full account of the way in which RIAs and ERAs and the funds they advise interact based on the contractual relationships between them and with investors.
Please contact James Hopegood with any questions regarding these proposals.
-
James Hopegood
Director, Asset Management Regulation
Timeline
AIMA has categorized these requirements as High Priority/Medium Impact and they are therefore represented in bright pink in the AIMA Regulatory Horizon Scan gantt chart.
Estimated Compliance Date3 | January 1, 2026 |
Estimated Effective Date2 | January 1, 2025 |
Estimated Publication Date1 | November 1, 2024 |
Responses to FinCEN NPRM due | April 15, 2024 |
FinCEN's NPRM published | February 14, 2024 |
1 Subject to change. We expect FinCEN to move quite quickly to finalize these requirements but have no solid basis for this estimate. It may well be later in 2024 or even into 2025, which would push back the effective and compliance dates as well.
2 Subject to change. The effective date has been estimated as 60 days following publication. Note that for this purpose we have assumed the FinCEN publication date and the Federal Register publication date are identical for ease of calculation. This will not be the case, but the actual time between (i) the FinCEN approval and publication and (ii) the official Federal Register publication is an unknowable period ranging from a few days to several weeks depending on multiple non-transparent variables. This means that in the end the actual effective date and therefore the actual compliance date will always be later than the estimate even if the FinCEN approval date estimate is correct.
3 Subject to change. The compliance date has been estimated as one year following the effective date.
Future AIMA Work
We will be holding a webinar to walk through what the proposed rules will require. Watch this space for details.