WASHINGTON–An exemptive relief order for investment advisors (IAs) covered by a September 2024 final rule imposing Bank Secrecy Act (BSA) anti-money laundering (AML) program requirements has been issued by the Financial Crimes Enforcement Network (FinCEN) and will remain in effect until Jan. 1, 2028, according to the agency.
According to FinCEN, the exemptive order was issued while it reviews the 2024 rule with the Trump administration’s deregulatory focus in mind.
FinCEN issued the 2024 final rule, titled “Anti-Money Laundering/Countering the Financing of Terrorism Program and Suspicious Activity Report Filing Requirements for Registered Investment Advisers and Exempt Reporting Advisers,” with an effective date of Jan. 1, 2026.
Rule More Than 2 Years Away
Now, FinCEN says it plans to issue a proposal with a new effective date for the rule “no earlier than Jan. 1, 2028.”
FinCEN’s Sept. 4, 2024 final rule defined certain investment advisers as “financial institutions” under BSA, requiring covered investment advisers to establish and maintain anti-money laundering/countering the financing of terrorism (AML/CFT) programs, report suspicious activity, and keep relevant records, among other requirements.
According to the agency, the rule addresses illicit finance risks, including that investment advisers may be misused by money launderers, terrorist financers, or other actors who seek access to the U.S. financial system for illicit purposes and who threaten U.S. national security, the order states.
Consistency Sought
“While the illicit finance risks associated with investment advisers remain, this review will allow FinCEN to ensure the IA AML Rule is consistent with the Administration’s deregulatory agenda and is effectively tailored to the diverse business models and risk profiles of the investment adviser sector – while still adequately protecting the U.S. financial system and guarding against money laundering, terrorist financing, and other illicit finance risks,” FinCEN said in a statement.
FinCEN added that its new exemptive relief will apply “to all financial institutions that meet the definition of ‘investment adviser’ set out” in the 2024 final rule.
