Money Laundering, Terrorism & Financial Institutions
Published by Civic Research Institute,

USA PATRIOT Act Monitor News Release: investment advisers and CTAs
5/1/2003 1:00:00 PM Eastern Daylight Time

FinCEN has issued proposed rules to require certain investment advisers and commodity trading advisers to implement anti-money laundering programs. The investment advisers (CTAs) covered by the proposed rules include those with $30 million in assets under management, whether or not registered with the SEC. Firms that do not accept funds or hold financial assets directly, and which have few or no assets under management, are in FinCEN's opinion "unlikely to play a significant role in money laundering." An investment adviser advising a mutual fund or a bank's common or collective trust fund could exclude those clients from its anti-money laundering program because mutual funds and banks are separately required to have such programs. So that the agency can be aware of their existence, FinCEN proposes to require unregistered advisers to file a notice, in the form appended to the release, not later than 90 days from when the adviser first becomes subject to 31 CFR 103.150. Much of the preamble language regarding investment advisers is reproduced in the release regarding CTAs. FinCEN is considering whether investment advisers and CTAs should be subject to suspicious activity reporting requirements. In a separate release, FinCEN has issued proposed rules requiring futures commission merchants and introducing brokers in commodities to file suspicious activity reports. The proposed rules are available on FinCEN's website, , under "What's New" and will be discussed in detail in the next issue of the USA PATRIOT Act Monitor.


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