WASHINGTON, Nov 16 (Thomson Reuters Accelus) - The U.S.
Treasury Department is developing long-awaited anti-money
laundering rules for investment advisers and plans to involve
the Securities and Exchange Commission and state regulators in
the process, a senior department official said.
James Freis Jr., director of Treasury's Financial Crimes
Enforcement Network (FinCEN), said regulation of investment
advisers in general under the Dodd-Frank Act has progressed
sufficiently far that FinCEN can "revisit" the issue, which it
put on the back burner in 2008 as it worked on rules for other
"FinCEN is currently revisiting the topic of investment
advisers, building on the changes to that industry pursuant to
the Dodd-Frank Act, the SEC rules implementing Dodd-Frank and
other changes, and is working on a regulatory proposal that
would require investment advisers to establish AML (anti-money
laundering) programs and report suspicious activity," Freis
told a Washington conference on money laundering on Tuesday.
"We look forward to working with the SEC as well as the
states as we move forward," he said.
FinCEN spokesman Bill Grassano later said he could not
specify which entities or professionals -- such as hedge fund
managers -- will be considered "investment advisers" for the
purposes of the rule. He did say, however, that FinCEN expects
to rely on SEC definitions to set a standard.
A U.S. regulatory official told Thomson Reuters that the
SEC has provided "technical advice" to FinCEN as part of its
effort to develop AML rules for investment advisers.
There has long been speculation that FinCEN was waiting to
see how Dodd-Frank requirements would be implemented for
advisers before developing its own rules. It is expected that
investment advisers will eventually have to enact AML programs
and report suspicious activity to FinCEN, obligations
broker-dealers have had for nearly a decade.
In 2008, the Treasury agency withdrew rules that it had
proposed in 2002 and 2003 for investment advisers, hedge fund
managers and commodity trading advisers. Since then, many have
wondered when new proposals would be issued.
"This was one of FinCEN's goals in its yearly statement
dated December 2010, so we were expecting them to put out
something. It has just taken longer than expected," said Betty
Santangelo, a partner with New York law firm Schulte Roth &