On July 21, the U.S. Treasury Department’s Financial Crimes Enforcement Network (“FinCEN”) announced that it intends to delay implementation of its final rule, Anti-Money Laundering/Countering the Financing of Terrorism Program and Suspicious Activity Report Filing Requirements for Registered Investment Advisers and Exempt Reporting Advisers (the “AML Program Rule”), from January 1, 2026 until January 1, 2028.
As summarized in our prior Alert, the AML Program Rule would require registered investment advisers and exempt reporting advisers, inter alia, to (1) adopt written anti-money laundering compliance programs; and (2) monitor for and report suspicious activity to FinCEN. FinCEN announced that it will work through the rulemaking process to extend the effective date.
FinCEN also intends to revisit a joint proposed rule, Customer Identification Programs for Registered Investment Advisers and Exempt Reporting Advisers (the “CIP Rule”), which was published in May 2024 (but has not been finalized). As summarized here, the CIP Rule (as originally proposed) would require investment advisers to establish a written customer identification program, including risk-based procedures for performing identification and verification of customers that open accounts.
The AML Program Rule has been in progress for over 20 years. FinCEN’s decision to delay—versus abandon—the AML Program Rule signals that the Administration still plans to extend affirmative anti-money laundering program requirements to investment advisers (and thereby bring the U.S. anti-money laundering regime more in line with other jurisdictions). The two-year reprieve will provide FinCEN the opportunity to tailor the AML Program Rule’s requirements to better align with investment advisers’ business models.