Per the Bank Secrecy Act (BSA) and FINRA Rule 3310, FINRA member firms are required to establish Anti-Money Laundering (AML) compliance programs. To assist its smaller member firms with fulfilling these responsibilities, FINRA publishes the “Anti-Money Laundering Template for Small Firms”, which provides instructions, relevant rules, text examples, relevant websites, and other resources that can be used to develop an AML plan for a small firm.
Anti-Money Laundering Compliance Programs
FINRA member firms’ AML compliance programs should be “risk-based” – the program’s AML policies, procedures, and internal controls should address firm-specific risks. A firm can conduct “risk assessments” by looking at a) the types and locations of customers the firm serves and b) the types of services the firm offers. Once a firm has determined its AML and terrorist financing risk, it can develop AML procedures to manage that risk.
However, while certain AML rules may be inapplicable due to the nature of a firm’s business, FINRA requires the firm to have controls in place to identify any changes in circumstance that would trigger previously inapplicable AML requirements, so that the firm may amend its policies and procedures to reflect the now-applicable AML requirements.
Anti-Money Laundering Template for Small Firms
The “Anti-Money Laundering Template for Small Firms” is provided as a helpful starting point for firms to develop their individualized AML compliance programs. Each firm is responsible for ensuring the program fits the firm’s risk level and that the firm correctly and fully implements the program.
The template provides examples of sample language that can be modified to fit a firm’s individual needs. Additionally, there are detailed instructions, citations of relevant rules, and links to other resources – all of which can be used to create and develop a firm’s AML compliance program.
Updates to Anti-Money Laundering Template for Small Firms
On April 4, 2018, in light of the Financial Crimes Enforcement Network’s (FinCEN) final rule on Customer Due Diligence Requirements for Financial Institutions (CDD Rule), FINRA updated its “Anti-Money Laundering Template for Small Firms”. These updates reflect member firms’ revised obligations under FINRA Rule 3310. Additionally, FINRA also updated rule citations and resources within the template, with hyperlinks directly to cited materials and additional guidance.
For additional guidance, firms may consult the main FINRA Anti-Money Laundering information page, which includes information and links to further resources. The Securities and Exchange Commission (SEC) also has an AML Source Tool for Broker-Dealers as well as a Spotlight on AML Rulemaking page, both of which firms may find helpful to consult. Finally, for added convenience and security, FinCEN provides the BSA E-Filing System, a service through which firms may electronically fulfill their BSA reporting requirements.