In a move to balance regulatory efficiency and cost, the U.S. Department of the Treasury’s Financial Crimes Enforcement Network (“FinCEN”) officially announced on July 21, 2025, that it will postpone the effective date, from January 1, 2026, to January 1, 2028, of the Investment Adviser Anti-Money Laundering Rule (“IA AML Rule”), see Anti-Money Laundering/Countering the Financing of Terrorism Program and Suspicious Activity Report Filing Requirements for Registered Investment Advisers and Exempt Reporting Advisers.
According to FinCEN, the delay will allow FinCEN to revisit the rule to ensure that regulation is appropriately tailored to the investment adviser industry’s diverse business models and risk profiles. FinCEN will engage in future rulemaking to revisit the substance of the IA AML Rule. This mirrors FinCEN’s approach to the Corporate Transparency Act (“CTA”) earlier in the year, in which emphasized a desire to reduce financial and operational burdens on businesses and tailor the specific requirements under the CTA to the risk presented.
This delay also represents the current Administration’s intent to limit regulation, in line with other recent FinCEN rules. For example, in March 2025, FinCEN issued an interim final rule, in which U.S. reporting companies are formally not required to report beneficial ownership.
FinCEN’s recent comments are a departure from the historical AML regulatory environment where the burden of assessing and mitigating money laundering and terrorism financing risks lies with the individual financial institutions. For example, financial institutions must consider their own risk factors, such as business size, geography, customer type, and services rendered. FinCEN also aims to reduce potential compliance costs and limit regulatory uncertainty as a broader review of the IA AML Rule is undertaken.
Adopted on September 4, 2024, the IA AML Rule intended to require SEC-registered investment advisers and exempt reporting advisers to establish written anti-money laundering programs tailored to their specific business risks, such as business size and activity type, customer base, account types and resultant customer transactions, and product risk. While the rule included various exceptions and exclusions, it still applied to advisers managing private funds and venture capital funds.
The IA AML Rule was widely viewed as a way to fill a regulatory gap under the Bank Secrecy Act (“BSA”). The BSA requires financial institutions to have AML programs consisting of certain minimum elements; however, investment advisers do not fall within the enumerated definition of “financial institution.” However, the BSA authorizes the Department of the Treasury to add to the statutory list “any business or agency which engages in any activity which Treasury determines, by regulation, is similar to, related to, or a substitute for any activity.” Therefore, FinCEN has attempted to use this authority to include investment advisers within the scope of the BSA.
Alongside postponing the AML Rule, FinCEN plans to partner with the SEC to revisit the proposed Customer Identification Programs for Registered Investment Advisers and Exempt Reporting Advisers (the “IA CIP Rule”) requirements for investment advisers, originally issued in May 2024.
The two-year delay buys critical preparation time for investment advisers. However, this change appears unavoidable –FinCEN remains committed to both AML and CIP requirements. As such, firms should continue to align business operations with risk-based compliance practices, monitor new rulemaking developments, and engage proactively, where appropriate, in policy dialogue.
