Wednesday, May 15, 2024

SEC, FinCEN propose new customer ID requirements for certain investment advisers

By Lene Powell, J.D.

To boost efforts against money laundering and terrorist financing, the SEC and FinCEN jointly proposed a new rule requiring certain investment advisers to have customer identification programs (CIPs). The rule would require SEC-registered investment advisers (RIAs) and exempt reporting advisers (ERAs) to establish, document, and maintain written CIPs to identify and verify the true identity of their customers (Customer Identification Programs for Registered Investment Advisers and Exempt Reporting Advisers, Release No. BSA-1 (May 13, 2024)).

SEC Chair Gary Gensler said the proposed rule is designed to make it more difficult to use false identities to establish customer relationships with investment advisers.

“I support this proposal because it could reduce the risk of terrorists and other criminals accessing U.S. financial markets to launder money, finance terrorism, or move funds for other illicit purposes,” said Gensler.

Read the rest of the story and other securities news from Wolters Kluwer at VitalLaw.com.