US: Treasury proposes new anti-money laundering regulations for investment advisers

The Biden administration is rolling out new recordkeeping rules for U.S. investment advisers in its continued effort to clamp down on money laundering, illicit finance and fraud in the American financial system.

The Treasury Department’s Financial Crimes Enforcement Network — known as FinCEN — proposed a regulation on Tuesday that would require investment advisers to develop anti-money laundering programs and file reports with the government when suspicious activity is detected by clients, among other things.

An occupation rife with regulatory gaps that can be exploited to launder money and hide illicit wealth, new regulations for investment advisers would “level the regulatory playing field, protect U.S. economic and national security, and safeguard American businesses,” said FinCEN Director Andrea Gacki in a statement.

The proposal follows other recent announcements by the Biden administration that target financial crime.

Treasury last week proposed a rule that would require real estate professionals to report information to the agency about non-financed sales of residential real estate to legal entities, trusts and shell companies. All-cash purchases of residential real estate are considered at high risk for money laundering. The rule would not require the reporting of sales to individuals.

Additionally, the agency has rolled out a new database on small business ownership. The so-called beneficial ownership registry is expected to contain personal information on the owners of at least 32 million U.S. businesses.

Treasury Secretary Janet Yellen said last month that 100,000 businesses have registered for the new database.

The investment adviser rule “will add further transparency to the U.S. financial system and help assist law enforcement in identifying illicit proceeds entering the U.S. economy,” a FinCen news release states.

A fact sheet states that the rule could be tightened over time to include keeping records on clients’ ownership information.

The White House in December 2021 laid out plans to prioritize anticorruption and bring more transparency to the financial system, “both at home and abroad, and to prevent authoritarians and kleptocrats from parking their ill-gotten wealth in the United States.”

Shortly after the announcement, Treasury conducted a risk assessment and found cases where sanctioned individuals, tax evaders, “and other criminal actors have used investment advisers as an entry point to invest in U.S. securities, real estate, and other assets,” according to a Treasury release.

The risk assessment also identified cases of Chinese and Russian individuals using investment advisers to access sensitive information and emerging technology, Treasury said.

7 June 2024

ASIA: China Plans New Way to Measure Products’ Carbon Footprint

China has announced plans for a new method to measure the ‘carbon content’ of its products – an issue that has caused tension with some of its trading partners. This move, seen as a key step in

Read More
20 February 2024

ST KITTS AND NEVIS: Prime Minister of St Kitts and Nevis addresses public on CBI Programme changes

Dr Terrance Drew, Prime Minister of St Kitts and Nevis, and his cabinet answered questions regarding the government’s recent economic decisions, from the public, in a press conference held on 13 February

Read More
29 January 2024

CHINA: Hedge Funds Lap up China Stocks at Fastest Pace in 5 Years

Hedge funds snapped up battered Chinese stocks over three days last week at the fastest pace in more than five years, Goldman Sachs wrote in a note to clients. The cumulative net buying of Chinese equities

Read More
20 May 2024

HONG KONG: Hong Kong’s family office measures succeed in attracting global interest

Hong Kong’s tax breaks and immigration policies to attract tycoons to set up family offices have been quite successful, as they have piqued the interest of many billionaires over the past year,

Read More