Registered Investment Advisers and Exempt Reporting Advisers will be responsible for full AML Compliance programming on January 1, 2026. FinCEN finalized its rule on this new requirement last year and described the requirements in a FinCEN fact sheet on AML Compliance for investment advisers. Investment advisers can prepare now to achieve AML Compliance next year.
The Financial Crimes Enforcement Network (FinCEN) in 2024 issued a final rule that extends anti-money laundering (AML) and countering the financing of terrorism (CFT) obligations to certain investment advisers. This includes registered investment advisers (RIAs) and exempt reporting advisers (ERAs) who report to the Securities and Exchange Commission (SEC).
AML Compliance regulations for investment advisers
This rule mandates these advisers to implement comprehensive, risk-based AML/CFT programs. Key requirements include the development of internal policies, procedures, and controls to address money laundering and terrorist financing risks. It also requires the designation of an AML/CFT compliance officer, the establishment of ongoing employee training, independent testing of AML/CFT programs, and the implementation of risk-based procedures for customer due diligence.
Furthermore, RIAs and ERAs will be required to file Suspicious Activity Reports (SARs) for transactions or activities that raise concerns and to submit Currency Transaction Reports (CTRs) for transactions involving currency amounts exceeding $10,000. Advisers must also adhere to the Recordkeeping and Travel Rules, which involve collecting and retaining information about transaction originators and beneficiaries, and sharing this information as necessary with financial institutions. Additionally, advisers are subject to the information-sharing provisions under sections 314(a) and 314(b) of the USA PATRIOT Act, which foster collaboration between financial institutions and law enforcement.
Certain entities, such as state-registered advisers, foreign private advisers, and family offices are excluded from these requirements to avoid duplicative measures. Compliance with this rule is expected by January 1, 2026. Failure to adhere could result in violations of the Bank Secrecy Act (BSA) and FinCEN regulations.
According to FinCEN, this final rule is a significant step in enhancing the integrity of the financial system by mitigating risks associated with money laundering and terrorist financing within the investment advisory sector.
AML Compliance solutions for investment advisers
Investment advisers can start now preparing for AML Compliance in 2026. AML Compliance solutions like the RegTechONE® platform can integrate, automate, and simplify every element of AML Compliance. AML solutions like RegTechONE provide no-code configurability that lets financial institutions control their workflows and automation by end-user configuration rather than custom coding and permanent consulting. And RegTechONE maximizes efficiency through integration and automation. Contact us today to learn how RegTechONE is a great solution for end-to-end AML Compliance for investment advisers.
