The Securities and Exchange Commission on Monday alerted broker-dealers to deficiencies found during exams as it relates to key anti-money laundering requirements.
According to the Risk Alert, some BDs “did not appear to devote sufficient resources, including staffing, to AML compliance given the volume and risks of their business.”
This issue can be exacerbated, the SEC warned, “in the current environment of new and increasing sanctions imposed by the Office of Foreign Assets Control (OFAC) against individuals and entities, particularly where the same firm personnel perform both AML and sanctions compliance functions.”
The agency’s Risk Alert also details observations about other key AML requirements, “such as independent testing of firms’ AML programs and training of their personnel, and identification and verification of customers and their beneficial owners,” the alert explains.
The SEC’s exam division also noticed that “the effectiveness of policies, procedures and internal controls was reduced when firms did not implement those measures consistently.”