All articles tagged with #investment advisers
The Division of Investment Management clarified that, under specific conditions, a State Trust Company can be treated as a 'bank' for custody of Crypto Assets and related cash or equivalents, provided it meets certain regulatory and operational standards, and the investment adviser or fund conducts due diligence and maintains proper agreements and disclosures.
The U.S. Treasury's FinCEN announced a delay in the implementation of the AML Rule for investment advisers, postponing its effective date from January 1, 2026, to January 1, 2028, to allow for a review and better tailoring to the sector's diverse risk profiles, while also providing regulatory certainty during the transition.
The Treasury Department's Financial Crimes Enforcement Network (FinCEN) has proposed new regulations to extend anti-money laundering (AML) rules to certain investment advisers, requiring them to file Suspicious Activity Reports (SARs) and disclose additional client information. The rules would apply to SEC-registered investment advisers, aiming to address gaps in AML regulations that have allowed illicit actors to exploit U.S. investment advisers for money laundering and other criminal activities. FinCEN's move marks the third attempt to expand AML provisions to cover investment advisers and comes amid a surge in the use of investment advisors for illicit finance, including by nation-state actors like Russia and China.
The U.S. Treasury's Financial Crimes Enforcement Network (FinCEN) has proposed a rule to apply comprehensive anti-money laundering and countering the financing of terrorism measures to certain investment advisers, including registered investment advisers (RIAs) and exempt reporting advisers (ERAs). The proposed rule aims to address the vulnerability of the investment adviser sector to illicit finance activity, enhance transparency, and protect the U.S. financial system against abuse by money launderers and other bad actors. The rule would require covered investment advisers to implement AML/CFT programs, file suspicious activity reports, and fulfill other obligations under the Bank Secrecy Act. The comment period for the proposed rule is open until April 15, 2024.
The U.S. Department of the Treasury's FinCEN has proposed a rule to combat illicit finance and national security threats in the investment adviser sector by requiring certain advisers to adhere to Anti-Money Laundering and Countering the Financing of Terrorism (AML/CFT) requirements. This rule aims to add transparency to the financial system, assist law enforcement in identifying illicit proceeds, and level the regulatory playing field to protect the U.S. economic and national security. The proposed rule would classify investment advisers as "financial institutions" under the Bank Secrecy Act, requiring them to implement AML/CFT programs, file suspicious activity reports, and fulfill recordkeeping requirements. FinCEN is seeking public comments on the proposed rule until April 15, 2024.
The Securities and Exchange Commission (SEC) has charged 10 firms, including broker-dealers and investment advisers, for widespread and longstanding failures to maintain and preserve electronic communications, violating recordkeeping provisions of federal securities laws. The firms have admitted to the violations and agreed to pay a combined penalty of $79 million. The SEC's investigations revealed off-channel communications and the failure to preserve these communications, potentially hindering SEC investigations. The firms have also been ordered to implement improvements to their compliance policies and procedures.
The Securities and Exchange Commission (SEC) has charged nine registered investment advisers for advertising hypothetical performance on their websites without implementing the required policies and procedures under the Marketing Rule. The charged firms, including Banorte Asset Management and Macroclimate LLC, have agreed to settle the charges and pay a combined total of $850,000 in penalties. Hypothetical performance advertisements pose a risk to investors whose financial situation and objectives may not align with the advertised investment strategy. The SEC emphasizes the importance of compliance with the Marketing Rule and will continue its investigation into potential violations.
The SEC has adopted amendments to Form PF, the confidential reporting form for certain SEC-registered investment advisers to private funds, to enhance the ability of the Financial Stability Oversight Council (FSOC) to assess systemic risk and to bolster the Commission’s oversight of private fund advisers and its investor protection efforts. The amendments will require large hedge fund advisers and all private equity fund advisers to file current reports upon the occurrence of certain reporting events that could indicate significant stress at a fund or investor harm. The amendments will become effective six months after publication of the adopting release in the Federal Register.
The US Securities and Exchange Commission (SEC) has issued a bulletin advising brokers and investment advisers to use heightened scrutiny when recommending crypto products to clients. The bulletin outlines the advisers' duties to customers and specifically mentions crypto, continuing the SEC's recent focus on the sector. The SEC guidance states that certain products are more complex and have additional risk features, making it more difficult for firms and their financial professionals to develop an understanding. Therefore, advisers must ensure that clients understand the products and whether crypto offerings make sense for their specific financial situations.