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FINRA Updates AML Template for Small Broker-Dealers

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The Financial Industry Regulatory Authority updated Wednesday the Anti-Money Laundering Template for small firms.

The update reflects member firms’ obligations under FINRA Rule 3310 in light of the Treasury Department’s Financial Crimes Enforcement Network’s (FinCEN) final rule on Customer Due Diligence Requirements for Financial Institutions.

FINRA provides the template to help small broker-dealers establish an AML compliance program as required by the Bank Secrecy Act and FINRA Rule 3310.

The template provides text examples, instructions, relevant rules and websites, and other resources.

FinCEN released Tuesday frequently asked questions guidance to help covered financial institutions understand the scope of the Customer Due Diligence Requirements for Financial Institutions rule.

FINRA advised broker-dealers to also note that they may access all of the guidance FINRA has provided regarding FINRA Rule 3310 on its Anti-Money Laundering main page.

A recently released report by Eversheds Sutherland found anti-money laundering was the top enforcement issue for FINRA in 2017 measured by total fines assessed, with FINRA reporting 16 AML cases in 2017, resulting in $14.6 million in fines.

FINRA’s first exam findings report, released last December, also found that firms with effective AML programs actively “tailor their risk-based AML program to the firm’s business model and associated AML risks as opposed to simply implementing a more ‘generic’ program.”

These firms also conducted “independent testing” that included sampling customer accounts in order to test whether the firm was collecting and verifying customer identification information on all individuals and entities that would be considered customers under the BSA, as well as trading and money movement activity to test whether the firm was performing adequate monitoring for and investigations of potentially suspicious activity.

— Check out FINRA Warns of Data Aggregation Dangers on ThinkAdvisor.


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