SEC Proposes Requirements Related to Customer Identification Programs

The SEC — in conjunction with the Financial Crimes Enforcement Network of the U.S. Department of the Treasury — has released a proposed rule that would require certain investment advisers that meet the definition of a “financial institution” in the Bank Secrecy Act of 1970 (i.e., SEC-registered investment advisers and exempt reporting advisers) “to establish, document, and maintain written customer identification programs.” The goal of the proposal, which is being released in response to a mandate of the Uniting and Strengthening America by Providing Appropriate Tools Required to Intercept and Obstruct Terrorism Act of 2001, would be “to prevent illicit finance activity involving the customers of investment advisers by strengthening the anti-money laundering and countering the financing of terrorism . . . framework for the investment adviser sector.”

For more information, see the press release and fact sheet — as well as the statements by SEC Chair Gary Gensler and Commissioner Mark Uyeda — on the SEC’s Web site.