RIAs and ERAs may soon be required to implement procedures to verify their clients’ identities.

On May 13, 2024, the Securities and Exchange Commission (SEC) and the US Department of the Treasury’s Financial Crimes Enforcement Network (FinCEN) jointly published a proposed rule (the Proposal) that, if adopted, would subject registered investment advisers (RIAs) and exempt reporting advisers (ERAs) to new anti-money laundering and countering the financing of terrorism (AML/CFT) compliance obligations.