Considerations for FinCEN 314(a) Policies and Procedures

Considerations for FinCEN 314(a) Policies and Procedures

The Financial Crimes Enforcement Network (FinCEN) is a program under Rule 31 CFR Part 1010.520 that requires certain financial institutions to search their records and identify if they have responsive information with respect to the particular investigative subject. This provides a service to law enforcement by providing an additional layer to help locate financial assets and recent transactions of individuals, entities, and organizations engaged in or reasonably suspected, based on credible evidence, of engaging in terrorist acts or money laundering activities. Who is required to perform FinCEN reviews? Currently, only broker-dealers are subject to FinCEN program 314(a) requirements. Registered investment Read more about Considerations for FinCEN 314(a) Policies and Procedures[…]

FinCEN’s New AML/CFT Priorities

FinCEN’s New AML/CFT Priorities

In October 2021, FINRA released Regulatory Notice 21-36 discussing the first government-wide priorities for anti-money laundering and countering the financing of terrorism policy, which was mandated by the Anti-Money Laundering Act of 2020 (AML Act). The AML/CFT Priorities FinCEN’s new AML/CFT Priorities focus on threats to the U.S. financial system and national security and reflect longstanding and continuing AML/CFT concerns previously identified by FinCEN and other U.S. government departments and agencies. They include predicate crimes to money laundering that generate illicit proceeds that illicit actors may launder through the financial system. FinCEN set forth eight priorities: Corruption; Cybercrime, including relevant Read more about FinCEN’s New AML/CFT Priorities[…]

5 W’s of the SAR Narrative

5 W’s of the SAR Narrative

The Financial Crimes Enforcement Network (“FinCEN”) requires certain financial institutions to file Suspicious Activities Reports (“SARs”) in order to enable law enforcement to initiate or supplement major money laundering or terrorist financing investigations and other criminal cases. Financial institutions use the SAR to document and report suspicious or potentially suspicious activity among their clients. The report has a narrative format, requiring financial institutions to document all suspicious activity concisely and in chronological order.

In general, a SAR narrative should identify the five essential elements of information – who?  what? when? where? and why?

Read More…

Filing A Suspicious Activity Report ("SAR")

Filing A Suspicious Activity Report (“SAR”)

The Financial Crimes Enforcement Network requires certain financial institutions to file a Suspicious Activities Reports (“SAR”) to report suspicious transactions, as detailed in their FinCEN SAR Electronic Filing Instructions. This blog will go over some of the important aspects of filing a Suspicious Activity Report.

Read More…

Customer Identification Program (CIP): Definitions and Requirements – Part II

[Continued from Customer Identification Program (CIP): Definitions and Requirements – Part I]

How Does Risk Assessment Affect a Firm’s CIP?

Appropriate verification procedures for a CIP are governed by a risk-based assessment. A CIP must include risk-based procedures for verifying the identity of each customer to a reasonable and practicable extent. These procedures must be based on the broker-dealer’s assessment of the relevant risks, including those presented by the types of accounts maintained by the broker-dealer, the methods of opening accounts, and the types of identification information available. Additionally, this risk-based assessment should take into consideration the broker-dealer’s size, location, and customer base.

Read More…

Customer Identification Program

Customer Identification Program (CIP): Definitions and Requirements – Part I

Customer Identification Program

A broker-dealer must establish, document, and maintain a written Customer Identification Program (CIP) as a part of the broker-dealer’s anti-money laundering (AML) compliance program (31 CFR 1023.220) as required by FINRA Rule 3310. The CIP must be appropriate for the broker-dealer’s size and business, and it must outline the following procedures: Read More…