Regulatory Update: SEC Broker-Dealer Risk Alert Regarding AML Suspicious Activity Monitoring and Reporting
The SEC’s Division of Examinations (“EXAMS”) has issued a Risk Alert regarding their compliance findings related to anti-money laundering (“AML”) requirements. In sharing its observations from these examinations of broker-dealers, EXAMS is seeking to remind firms of their obligations under AML rules and regulations and to assist broker-dealers in reviewing and enhancing their AML programs, in particular their monitoring for and reporting of suspicious activity to law enforcement and financial regulators. Mutual funds also may benefit from the examination observations discussed here. The Risk Alert states the following and notes the following areas that need enhancement at broker-dealers.
AML Policies and Procedures and Internal Controls
Suspicious Activity Monitoring and Reporting
The Bank Secrecy Act (“BSA”) and implementing regulations establish the basic framework for AML obligations imposed on financial institutions.2 The Financial Crimes Enforcement Network (“FinCEN”), a bureau of the Department of Treasury, adopted the “AML Program Rule” and the “SAR Rule” to implement AML programs and suspicious activity monitoring and reporting requirements for broker-dealers Rule 17a-8 under the Securities Exchange Act of 1934 (“Exchange Act”) requires broker-dealers to comply with the reporting, recordkeeping, and record retention requirements of the BSA, including those regarding Suspicious Activity Reports (“SARs”).
See the full alert here: https://www.sec.gov/files/aml-risk-alert.pdf
