Treasury Announces 2-Year Delay of AML/CFT Rule for Investment Advisers
The Treasury Department plans to delay for two years the implementation of a new anti-money laundering rule focused on investment advisers while one of its bureaus, the Financial Crimes Enforcement Network (FinCEN), revisits the scope of the rule.
[contact-form-7]The agency postponed the effective date of the final rule establishing Anti-Money Laundering/Countering the Financing of Terrorism Program and Suspicious Activity Report Filing Requirements for Registered Investment Advisers and Exempt Reporting Advisers (IA AML Rule) until Jan. 1, 2028, the Treasury Department said in a Monday (July 21) press release.
The previous effective date for the IA AML Rule was Jan. 1, 2026, according to the release.
The release said the agency announced the postponement “to ensure efficient regulation that appropriately balances costs and benefits” and that it aims to ease the industry’s compliance costs and reduce regulatory uncertainty.
“The IA AML Rule seeks to address ongoing illicit finance risks, threats and vulnerabilities posed by criminals and foreign adversaries that exploit the U.S. financial system and assets through investment advisers,” the release said. “FinCEN recognizes, however, that the rule must be effectively tailored to the diverse business models and risk profiles of the investment adviser sector.”
The IA AML Rule that was postponed Monday was announced by FinCEN during the Biden administration in an Aug. 28, 2024, press release.
The bureau said at the time that the rule would protect the investment adviser sector from illicit finance and address “the uneven application of AML/CFT requirements across this industry” by applying those requirements to certain investment advisers that are registered with the Securities and Exchange Commission (SEC) as well as those that report to the SEC as exempt reporting advisers.
“The Treasury Department has been hard at work to disrupt attempts to use the United States to hide and launder ill-gotten gains,” Janet Yellen, who was secretary of the Treasury at the time, said in the press release. She added that the rule would address one of “our biggest regulatory deficiencies.”
It was reported in April that the Treasury Department was taking the lead in the Trump administration’s efforts to streamline oversight and ease regulation in the banking sector.
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