30 April 2003
Treasury Proposes New Anti-Money Laundering Rules
(Regulations cover securities and commodities trading advisers) (590)
The U.S. Treasury has proposed new regulations that would require
advisers involved in the trading of securities and commodities to set
up comprehensive programs to combat money laundering.
In an April 29 news release, Treasury said the new rules would also
require futures commission merchants to report "suspicious activity."
"These rules will serve as additional tools in the [Bush]
administration's continuing effort to fight illicit money laundering,"
Treasury said in the release.
The proposed rules are the latest in a series of actions taken by the
Bush administration to implement the Patriot Act, the broad
legislation that was passed by Congress following the September 2001
terrorist attacks. The Act included measures that expanded the
government's ability to crack down on money launderers and terrorism
Comments on the proposed rules will be accepted for sixty days from
the date of the rules' publication in the Federal Register, which is
expected later in the week of April 27, Treasury said.
Following is the text of the news release:
U.S. Department of the Treasury
Office of Public Affairs
April 29, 2003
Treasury Issues Proposed Anti-Money Laundering Rules
for the Securities and Commodities Industry
The Department of the Treasury and the Financial Crimes Enforcement
Network [FinCEN] today issued three separate proposed rules under the
USA Patriot Act that would expand anti-money laundering regulation to
commodity trading advisors and securities investment advisers, as well
as require suspicious activity reporting by futures commission
merchants. The proposed rules would amend the Bank Secrecy Act (BSA)
regulations as part of Treasury's continuing implementation of the USA
PATRIOT Act. Interested parties will have sixty days to comment on the
proposed rules following their publication in the Federal Register,
which is expected to occur later this week. These rules will serve as
additional tools in the Administration's continuing effort to fight
illicit money laundering.
First, Treasury and FinCEN propose to require certain commodity
trading advisors (CTAs), registered with the Commodity Futures Trading
Commission (CFTC), to establish an anti-money laundering program
pursuant to section 352 of the PATRIOT Act. The proposed rule covers
those CTAs who have the authority to direct client commodity futures
or options accounts. The regulation will not apply to CTAs who provide
trading advice but do not manage client funds. The requirements of the
proposed rule are similar to those for other financial institutions
subject to section 352.
Treasury and FinCEN have also issued a proposed rule that would
require securities investment advisers to establish an anti-money
laundering program pursuant to section 352 of the PATRIOT Act. The
proposed rule covers investment advisers registered with the
Securities and Exchange Commission (SEC) as well as advisers that have
$30 million or more of assets under management but are not required to
register with the SEC under a statutory exception for investment
advisers with fewer than 15 clients and who do not hold themselves out
publicly as advisers. These unregistered advisors will also be
required to file an annual notice with FinCEN identifying themselves.
Like the rule for CTAs, the proposed rule only covers investment
advisers that manage client funds.
Finally, Treasury and FinCEN issued a proposed rule that would require
futures commission merchants and introducing brokers to file
suspicious activity reports. Under a previous rule, these firms were
required to develop anti-money laundering programs. In addition, the
proposed rule would subject these firms to the general recordkeeping
and reporting requirements of the BSA.
(Distributed by the Office of International Information Programs, U.S.
Department of State. Web site: http://usinfo.state.gov)