Money Laundering, Terrorism & Financial Institutions
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News Releases

11/26/2003 USA PATRIOT Act Monitor News Release: SAR Requirements Finalized for FCMs

Final Rules Require Futures Commission Merchants and Introducing Brokers in Commodities to File SARs

In May 2003, the Financial Crimes Enforcement Network published proposed regulations to extend the reporting and recordkeeping obligations of the BSA to futures commission merchants (FCMs) and introducing brokers in commodities (IB-Cs). FinCEN received comments on the proposed rules from the National Futures Association and the Futures Industry Association, and has now issued the rules in final form (68 Fed. Reg. 65392, November 20, 2003). Relatively few changes were made to the proposed rules. The final rules do clarify that entities registering with both the CFTC and the SEC for purposes other than dealing in securities futures products must satisfy the suspicious activity reporting requirements applicable either to FCMs and IB-Cs (31 CFR 103.17) or those applicable to BDs (31 CFR 103.19). Compliance with either regulation will be deemed to be compliance with the other, so that dual registrants are not subject to conflicting reporting requirements. The preamble contains a discussion of situations where a SAR should be filed by an FCM or IB-C, and describes some "red flags" where a SAR may, or may not, be appropriate. The new rules will be discussed in detail in a forthcoming issue of the Monitor.

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