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FINRA has issued guidance on incorporating its anti-money laundering and countering terrorist financing priorities into firms’ compliance programs. This outline of their approach will be useful when it comes to preparing for the final regulations.
As a follow up to FinCen’s June AML/CFT priorities letter, the guidance was issued via Reg Notice 21-36. FINRA published the notice as an effort to inform and encourage its member firms to consider how to incorporate the government-wide AML/CFT priorities into their risk-based anti-money laundering compliance programs.
Under FINRA Rule 3310, firms are required to develop, implement, maintain, and supervise a written AML compliance framework that is designed to meet the requirements set forth in the Bank Secrecy Act.
Although FinCen has not yet declared clear cut final regulations as to how financial institutions should incorporate its AML/CFT priorities, there is indication that this will be issued by the end of 2021. The final regulations will outline how financial institutions, like broker-dealers, should incorporate the AML/CFT priorities into their programs.
Firms should start considering how they will incorporate the priorities into their AML compliance framework, by assessing the potential risks associated with the products and services they offer, the customers they serve, and the geographic areas in which they operate. Additionally, FINRA member firms may wish to begin contemplating potential technological changes that may be appropriate in order to incorporate the AML/CFT Priorities into their risk-based AML programs. This could include changes to the technology used to monitor and investigate suspicious activity.
How Bovill can help
Bovill can help prepare your broker-dealer be in a position of compliance, and implement best practices as outlined in the FinCen priorities letter. To remain in compliance with the forthcoming FinCen regulations and supervisory expectations, it is important for broker-dealers to conduct current evaluations of their risk profiles and applicable environments with respect to their AML compliance framework.
Bovill regularly performs the necessary annual reviews for our broker-dealer clients to assess adherence to FINRA Rule 3310 and the BSA. In addition, Bovill can review previous deficiencies identified, and strategically implement measures to remediate deficiencies, as required, and to prepare for forthcoming FINRA examinations, and the impending FinCen regulations which are expected to become applicable by the end of the year.