On August 16, the U.S. Department of the Treasury published its semiannual regulatory agenda in the Federal Register, detailing the agency’s upcoming regulatory actions and priorities. The agenda outlines the proposed, final, and long-term rulemaking activities across various divisions, including the Financial Crimes Enforcement Network (FinCEN).
Highlights from the agenda, include:
Proposed Rule Stage:
- Establishment of National Exam and Supervision Priorities: FinCEN intends to issue a notice of proposed rulemaking under § 6101(b) of the Anti-Money Laundering Act of 2020: (i) incorporating a risk assessment requirement for financial institutions; (ii) requiring financial institutions to incorporate anti-money laundering and countering the financing of terrorism priorities into risk-based programs; and (iii) providing for certain technical changes.
- Revisions to Customer Due Diligence Requirements for Financial Institutions: FinCEN intends to issue a notice of proposed rulemaking entitled “Revisions to Customer Due Diligence Requirements for Financial Institutions,” under § 6403(d) of the Corporate Transparency Act (CTA). This section requires FinCEN to revise its customer due diligence requirements for financial institutions to account for the changes created by the beneficial ownership information reporting and access requirements set out in the CTA.
- Investment Adviser Customer Identification Program Requirements: This rule aims to apply customer identification program requirements to registered investment advisers and exempt reporting advisers.
Final Rule Stage:
- Residential Real Estate Transaction Reports and Records: FinCEN intends to finalize a rule to address money laundering vulnerabilities in the residential real estate sector by requiring certain persons involved in real estate closings and settlements to report non-financed transfers of residential real property made to specified legal entities or trusts.
- Anti-Money Laundering (AML) Program and Suspicious Activity Report (SAR) Filing Requirements for Investment Advisers: FinCEN intends to finalize a rule that would prescribe minimum standards for AML programs to be established by certain investment advisers and to require such investment advisers to report suspicious activity to FinCEN pursuant to the Bank Secrecy Act (BSA).
Long-Term Actions:
- Amendments to the Definition of Broker or Dealer in Securities (Crowd Funding): FinCEN is finalizing amendments to the regulatory definitions of “broker or dealer in securities” under the BSA intended to include funding portals involved in the offering or selling of securities through crowdfunding. These amendments would also require funding portals to implement policies and procedures reasonably designed to achieve compliance with all of the BSA requirements that are currently applicable to brokers or dealers in securities.
- Clarification on Convertible Virtual Currencies and Digital Assets: The Board of Governors of the Federal Reserve System and FinCEN intend to issue a revised proposal to clarify the meaning of “money” as used in the rules implementing the BSA requiring financial institutions to collect, retain, and transmit information on certain funds transfers and transmittals of funds. The aim of the proposal is to ensure that the rules apply to domestic and cross-border transactions involving convertible virtual currency and clarify that these rules apply to domestic and cross-border transactions involving digital assets that have legal tender status.
- BSA Application to Dealers in Antiquities and Arts: FinCEN intends to propose a rule amending the BSA to include as a financial institution a person engaged in the trade of antiquities, including an advisor, consultant, or any other person who engages as a business in the solicitation or the sale of antiquities, subject to regulations prescribed by the Secretary of the Treasury.
- Pilot Program on Sharing SAR Information Within Financial Groups: FinCEN intends to propose a rule amending the BSA to establish a pilot program that permits financial institutions to share SAR information with their foreign branches, subsidiaries, and affiliates for the purpose of combating illicit finance risks.
- Commercial Real Estate Transaction Reports and Records: FinCEN intends to propose a rulemaking to address money laundering vulnerabilities in the U.S. commercial real estate sector.
