SEC Risk Alert: Broker-Dealers Anti-Money Laundering Compliance
SEC Risk Alert: Observations from Anti-Money Laundering Compliance Examinations of Broker-Dealers
Observations from Anti-Money Laundering Compliance Examinations of Broker-Dealers
Today the Division of Examinations published a Risk Alert presenting examination observations about key AML requirements. It reiterates the critical importance of AML compliance to the Commission and law enforcement’s pursuit of misconduct that could threaten the safety of investor assets and the integrity of the financial markets.
The Risk Alert presents examination observations about 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.
Broker-dealers are required to implement and maintain a written AML program, approved in writing by senior management, that includes, at a minimum:
policies, procedures, and internal controls reasonably designed to achieve compliance with the Bank Secrecy Act (BSA)5 and the implementing regulations thereunder;
policies and procedures that can be reasonably expected to detect and cause the reporting of transactions under 31 U.S.C. § 5318(g) and the implementing regulations thereunder;
the designation of an AML compliance officer responsible for implementing and monitoring the operations and internal controls of the program (including notification to FINRA);
ongoing employee AML training;
an independent test of the firm’s AML program, annually for most firms; and
appropriate risk-based procedures for conducting ongoing CDD. These should include, but not be limited to, procedures to: (1) understand the nature and purpose of customer relationships to be able to develop a risk profile, and (2) conduct ongoing monitoring to identify and report suspicious transactions as well as maintain and update customer information, including beneficial ownership information for legal entity customers.
View the Risk Alert: Observations from Anti-Money Laundering Compliance Examinations of Broker-Dealers. https://www.sec.gov/files/risk-alert-aml-compliance-examinations-bd-073123.pdf
