Firms must comply with the Bank Secrecy Act and its implementing regulations (“AML rules”). The purpose of the AML rules is to help detect and report suspicious activity including the predicate offenses to money laundering and terrorist financing, such as securities fraud and market manipulation.
FINRA reviews a firm’s compliance with AML rules under FINRA Rule 3310, which sets forth minimum standards for a firm’s written AML compliance program. The basic tenets of an AML compliance program under FINRA 3310 include the following.
- The program has to be approved in writing by a senior manager.
- It must be reasonably designed to ensure the firm detects and reports suspicious activity.
- It must be reasonably designed to achieve compliance with the AML Rules, including, among others, having a risk-based customer identification program (CIP) that enables the firm to form a reasonable belief that it knows the true identify of its customers.
- It must be independently tested to ensure proper implementation of the program.
- An individual responsible for AML must be designated to FINRA.
- Ongoing training must be provided to appropriate personnel.
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|31 CFR Chapter X §1023- Rules for Brokers or Dealers in Securities|
Bank Secrecy Act Rules for Brokers or Dealers in Securities
|31 CFR §1023.220- Customer identification programs for broker-dealers||Rule||12-22-2015|
|FINRA Sanctions Cantor Fitzgerald & Co. $7.3 Million for Selling Billions of Unregistered Microcap Shares, and for Related Supervisory and AML Violations|
Monday, December 21, 2015 Michelle Ong (202) 728-8464 Nancy Condon (202) 728-8379 Trader and Supervisor Suspended and Fined WASHINGTON — The Financial Industry Regulatory Authority (FINRA) announced today that it has fined Cantor Fitzgerald & Co. $6 million and ordered disgorgement of nearly $1
|FINRA Expels Halcyon Cabot Partners and Bars CEO and CCO for Fraud, Sales Practice Abuses, and Widespread Supervisory and AML Failures|
FINRA announced today that it has expelled New York-based Halcyon Cabot Partners, Ltd., and barred Chief Executive Officer Michael Morris and Chief Compliance Officer Ronald Heineman from the securities industry, for fraud, sales practice abuses, and widespread supervisory and anti-money laundering failures.
|FINRA Fines Aegis Capital Corp. $950,000 for Sales of Unregistered Penny Stocks and AML Violations|
FINRA announced today that it has fined Aegis Capital Corp. $950,000 for improperly selling unregistered penny stocks and for related supervisory failures, and for failing to implement anti-money laundering (AML) policies and procedures.
|FINRA's 2015 Regulatory and Examination Priorities Part 4|
Part four of this six-part series covers sales practice priorities like senior investors and anti-money laundering.
|FINRA Sanctions LPL Financial LLC $11.7 Million for Widespread Supervisory Failures Related to Complex Products Sales, Trade Surveillance and Trade Confirmations Delivery|
Wednesday, May 6, 2015 Michelle Ong (202) 728-8464 Nancy Condon (202) 728-8379 LPL Ordered to Pay Approximately $1.7 Million in Restitution to Customers WASHINGTON — The Financial Industry Regulatory Authority (FINRA) announced today that it has censured LPL Financial LLC and fined it $10 million
|MSRB Final Rule G-41|
Anti-Money Laundering Compliance Program
|SEC and FinCEN re-extend no-action letter relief with some changes for CIP reliance upon investment advisers||Link||02-18-2015|
|The Office of Foreign Assets Control (OFAC)|
The Office of Foreign Assets Control (OFAC), a Bureau of the Treasury Department, The Office of Foreign Assets Control ("OFAC") of the US Department of the Treasury administers and enforces economic and trade sanctions based on US foreign policy and national security goals against targeted foreign countries, terrorists, international narcotics traffickers, and those engaged in activities related to the proliferation of weapons of mass destruction. OFAC acts under Presidential wartime and national emergency powers, as well as authority granted by specific legislation, to impose controls on transactions and freeze foreign assets under US jurisdiction.
|Report of Blocked Transactions Form: Please fax completed form to: (202) 622-2426|
Please fax completed form to: (202) 622-2426
|Report of International Transportation of Currency or Monetary Instruments (CMIR)||Link||02-13-2015|
|FinCEN Mandatory E-Filing FAQ||Link||02-13-2015|
|Report of Foreign Bank and Financial Accounts (FBAR) (FinCEN 114) Line Item Electronic Filing Instructions||Link||02-13-2015|
|FinCEN’s SAR Activity Reviews – By the Numbers||Link||02-13-2015|
|FinCEN’s SAR Activity Reviews – Trends, Tips & Issues||Link||02-13-2015|
|Section 311 Special Measures|
Section 311 Special Measures: Under Section 311 of the USA PATRIOT Act, the Secretary of the Treasury can designate particular jurisdictions or financial institutions to be of “primary money laundering concern.”
|Suspicious Activity Report||Form||02-12-2015|
|Currency Transaction Report (CTR)||Link||02-12-2015|
|American Bankers Association Resource Guide: Identification and Verification of Account||Link||02-12-2015|
|FATF Guidance on the Risk-Based Approach to Combating Money Laundering and Terrorist Financing||Link||02-12-2015|
|The Financial Action Task Force (FATF)||Link||02-12-2015|
|FATF High Risk and Non-Cooperative Jurisdictions||Link||02-12-2015|
|FATF Methods and Trends for Money Laundering and Financing Illicit Activities||Link||02-12-2015|
|Federal Financial Institutions Examination Council (FFIEC)||Link||02-12-2015|