First, broker-dealers are responsible for complying with all anti-money laundering requirements to which they are subject. While this research guide summarizes some of the key anti-money laundering obligations that apply to broker-dealers, it is not exhaustive. You should not rely on the summary information provided, but refer to the relevant laws, rules, ordinances and interpretations. 7. What are the requirements of the CIP rule? For private bank accounts set up for non-U.S. accounts. Individuals specifically defined in the Bank Secrecy Act as accounts with a minimum deposit requirement of $1,000,000 and the assignment of a login for the account, the member firm must “determine the source(s) of funds deposited in a private bank account and the purpose and intended use of the account.” See 31 CFR 1010.620. If you do not have an MLRO due to the nature or size of your business, TCL is available to assist you with your regulatory needs. The CIP rule provides that broker-dealers may, in certain defined circumstances, rely on another financial institution to meet some or all of the requirements of the broker-dealer`s CIP. For example, for a broker-dealer to rely on the other financial institution, trust must be adequate.
The other financial institution must also be subject to an anti-money laundering compliance program rule and regulated by a functional federal regulator. The broker-dealer and another financial institution must enter into a contract and the other financial institution must certify annually to the broker-dealer that it has implemented an anti-money laundering program. The other financial institution must also certify to the broker-dealer that it will meet the requirements specified in its CIP. [5] Section 312 of the USA PATRIOT Act amended the BSA to, among other things, impose special due diligence requirements on financial institutions, including dealers, that establish, maintain, manage or manage a private bank account or “corresponding account” in the United States for a “non-U.S. person.” FinCEN regulations require a “covered financial institution” to maintain a due diligence program that includes policies, procedures and controls reasonably designed to detect and report known or suspected money laundering or suspicious activity conducted through or with a “private bank account” established, maintained, managed or administered by the financial institution in the United States. In addition, the rules set certain minimum requirements for the required due diligence program for private bank accounts and require enhanced oversight of accounts whose nominal or beneficial owner is a “senior foreign political figure.” FINRA Please contact your local FINRA coordinator directly if you have any questions about anti-money laundering requirements. If you have not received a notification through your designated coordinator, contact your FINRA district office for more information. Contact information can be found at the following link: www.finra.org/contact-finra. FINRA Rule 3310 sets minimum standards for anti-money laundering compliance programs for broker-dealers. It requires businesses to develop and implement a written anti-money laundering compliance program. The programme must be approved in writing by a member of the Executive Board and must be designed in such a way as to ensure and monitor the member`s continued compliance with the requirements of the Bank Secrecy Act and the implementing regulations published therein. In accordance with the Bank Secrecy Act, FINRA Rule 3310 requires at least that businesses: The importance of strong BSA/AML compliance was highlighted in a FinCEN recommendation dated August 11, 2014 to promote a culture of compliance among financial institutions.
The notice did not change any existing expectations or obligations under BSA/AML requirements and highlights the importance of strict compliance for senior management, governance and owners of all financial institutions subject to FinCEN regulation. Neither the Bank Secrecy Act nor FINRA Rule 3310 requires individuals who comply with AML to register as agents or principals. However, our general registration requirements state that individuals who engage in investment banking or securities trading for a member must register. The NASD rules specify that activities that trigger registration include securities` monitoring, soliciting or business functions or training persons associated with a member for any of these functions. Thus, informing registrants of the use of suspicious transaction reports would not only trigger registration requirements, but informing registrants of certain securities products could trigger registration requirements.