Don’t miss the the AML Challenges panel at the 2018 FINRA Annual Conference on May 23, 2018 in Washington DC. FirstMark’s founder, Mitch Atkins, will present as a panelist. One of the key topics to be discussed is the FinCEN CDD Rule. The rule became fully effective May 11, 2018. If you’re ready, or even if you’re not, implementation questions still abound. As recently as April 2018. FinCEN issued additional guidance in the form of FAQs. This was the second round of FAQs issued on the FinCEN CDD Rule. The first round can be found here. Many firms have experienced challenges in understanding the nuances involved with the beneficial ownership requirements, including the ownership and control prong. There are numerous exceptions and interpretations to both. Also, perhaps more challenging has been the so-called “fifth pillar” requirements that involving ongoing monitoring to detect potential suspicious activity. The FinCEN CDD Rule codifies, for the first time, the requirement to conduct ongoing monitoring and to update customer information if there are red flags noted. Some AMLCOs have struggled with the concept of the fifth pillar, particularly with regard to the ongoing monitoring requirements. Questions have arisen as to whether the FinCEN CDD Rule requires that small firms implement an automated surveillance system. Guidance issued by Treasury on the FinCEN CDD Rule provides that this is not true – there is no new requirement to install a trade surveillance system. Instead, the FAQs explain that the monitoring can be done on a risk basis. However, during the course of the normal risk monitoring, if a red flag of potentially suspicious activity is noted, the customer profile that was developed based on the FinCEN CDD Rule “nature and purpose” provision should be revisited and if necessary updated. All of these issues will be addressed on the AML Challenges panel at the 2018 FINRA Annual Conference in Washington DC. If you haven’t signed up and were considering doing so, you can at this link. Also, you can view the conference video
Click on the image below to view the conference brochure:
Click on the image below to view FirstMark’s presentation materials (a practical quick reference guide to the FinCEN CDD Rule).
FirstMark Regulatory Solutions, Inc. is a compliance consulting organization based in Boca Raton, Florida. Mitch Atkins is FirstMark’s founder and principal. He focuses on broker-dealer compliance matters, including anti-money laundering independent testing, FINRA new member applications, FINRA CMAs, FINRA Enforcement litigation support, and supervisory controls testing.