BPI Comments on FinCEN Proposal Updating AML Rules for Registered Investment Advisers

To Whom It May Concern:

The Bank Policy Institute[1] appreciates the opportunity to respond to the FinCEN’s notice of proposed rulemaking (NPRM or proposal) that would apply requirements under the Bank Secrecy Act to registered investment advisers and exempt reporting advisers (together, covered investment advisers), including an AML program obligation and a SAR filing requirement.”[2] We appreciate FinCEN’s focus on this important area.

Appropriate management of AML/CFT risks relating to all of the businesses and activities within a bank holding company – including investment advisory businesses – has been a significant focus for banking organizations for many years. In this NPRM, FinCEN proposes that covered investment advisers would have flexibility to design their programs to meet the specific risks of the advisory services they provide and the clients they advise, therefore recognizing the diversity that exists among investment advisers and permitting them, and where applicable, their parent holding companies, to tailor their AML programs in a manner consistent with the risks presented.

We believe applying an AML program requirement and other obligations under the BSA to covered investment advisers in a risk-based manner would promote the overall purposes of the BSA, including to “prevent the laundering of money and the financing of terrorism” through the establishment of “reasonably designed risk-based programs,”[3] and therefore recommend that FinCEN finalize this Proposal.

While other stakeholders are providing more comprehensive comments on the proposal, we highlight the following points that are particularly pertinent for banking institutions, with dual-registered covered investment advisers, and/or bank affiliated investment advisers.

To read the full comment letter, please click here, or click on the download button below.


[1] The Bank Policy Institute is a nonpartisan public policy, research and advocacy group that represents universal banks, regional banks, and the major foreign banks doing business in the United States. The Institute produces academic research and analysis on regulatory and monetary policy topics, analyzes and comments on proposed regulations, and represents the financial services industry with respect to cybersecurity, fraud, and other information security issues. Issues of focus include capital and liquidity regulation, anti-money-laundering, payment systems, consumer protection, bank powers, bank examination, and competition in the financial sector.

[2] 89 Fed. Reg. 12108.

[3] 31 U.S.C. § 5311(2).