(Reuters) – Two U.S. financial regulators jointly proposed new rules on Monday that would fight money laundering by requiring fund advisers to document customer identities, part of a wider effort to keep dirty money out of the investment industry.
The new rules were proposed by the U.S. Securities and Exchange Commission and the U.S. Treasury Treasury’s Financial Crimes Enforcement Network (FinCEN). In February, FinCEN proposed requiring investment advisers to adopt anti-money laundering programs and calling on real estate professionals to flag suspicious transactions.
The new rule applies to SEC-registered investment advisers and fund advisers that are exempt from registration due to the nature and amount of their customers’ funds. The rule does not apply to advisers registered at the state level as they present a lesser risk of illicit finance, a Treasury official told reporters on Monday.
THE TAKE
Washington is increasingly tightening controls on the financial system to keep adversaries’ money off Wall Street and out of US bank accounts as conflicts rage in Europe, the Middle East and elsewhere.
The proposal unveiled Monday follows a U.S. Treasury risk assessment this year which found suspect financial transfers increasingly associated with both registered and exempt investment advisers.
CONTEXT
Monday’s proposal was not unanimous. Mark Uyeda, a Republican SEC member, dissented, saying regulators should first have determined the scope of investment adviser services covered by the Bank Secrecy Act, a key anti-money laundering statute.
In a statement, Uyeda called the proposal’s goals “laudable” but said there were “legitimate questions as to whether imposing additional burdens on investment advisers will meaningfully contribute to those efforts.”
(Reporting by Douglas Gillison; Editing by David Gregorio)
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