Delaying the Effective Date of the Anti-Money Laundering/Countering the Financing of Terrorism Program and Suspicious Activity Report Filing Requirements for Registered Investment Advisers and Exempt Reporting Advisers

DEPARTMENT OF THE TREASURY <SUBAGY>Financial Crimes Enforcement Network</SUBAGY> <CFR>31 CFR Part 1032</CFR> <RIN>RIN 1506-AB58 and 1506-AB69</RIN> <SUBJECT>Delaying the Effective Date of the Anti-Money Laundering/Countering the Financing of Terrorism Program and Suspicious Activity Report Filing Requirements for Registered Investment Advisers and Exempt Reporting Advisers</SUBJECT> <HD SOURCE="HED">AGENCY:</HD> Financial Crimes Enforcement Network (FinCEN), Treasury. <HD SOURCE="HED">ACTION:</HD> Notice of proposed rulemaking (NPRM). <SUM> <HD SOURCE="HED">SUMMARY:</HD> FinCEN is proposing to amend the Anti-Money Laundering/Countering the Financing of Terrorism (AML/CFT) Program and Suspicious Activity Report (SAR) Filing Requirements for Registered Investment Advisers and Exempt Reporting Advisers (IA AML Rule) to delay the effective date by two years. The IA AML Rule is effective on January 1, 2026. This proposal seeks to amend the effective date to January 1, 2028. </SUM> <EFFDATE> <HD SOURCE="HED">DATES:</HD> Comments must be received by October 22, 2025. </EFFDATE> <HD SOURCE="HED">ADDRESSES:</HD> Comments must be submitted in one of the following two ways (please choose only one of the ways listed): • Electronically at <E T="03">https://www.regulations.gov.</E> Follow the “Submit a comment” instructions. If you are reading this document on <E T="03">federalregister.gov</E> , you may use the green “SUBMIT A PUBLIC COMMENT” button beneath this rulemaking's title to submit a comment to the <E T="03">regulations.gov</E> docket. Refer to Docket Number FINCEN-2025-0072 and RIN 1506-AB58 and 1506-AB69. • You may mail written comments to the following address: Policy Division, Financial Crimes Enforcement Network, P.O. Box 39, Vienna, VA 22183. Refer to Docket Number FINCEN-2025-0072 and RIN 1506-AB58 and 1506-AB69. Mailed comments must be received by the close of the comment period. Do not include any personally identifiable information (such as name, address, or other contact information) or confidential business information that you do not want publicly disclosed. All comments are public records; they are publicly displayed exactly as received, and will not be deleted, modified, or redacted. Comments may be submitted anonymously. Follow the search instructions on <E T="03">https://www.regulations.gov</E> to view public comments. In accordance with 5 U.S.C. 553(b)(4), a summary of this rule may be found at <E T="03">www.regulations.gov</E> under Docket Number FINCEN-2025-0072. <FURINF> <HD SOURCE="HED">FOR FURTHER INFORMATION CONTACT:</HD> FinCEN's Regulatory Support Section by submitting an inquiry at <E T="03">www.fincen.gov/contact.</E> </FURINF> <SUPLINF> <HD SOURCE="HED">SUPPLEMENTARY INFORMATION:</HD> <HD SOURCE="HD1">I. Introduction</HD> In this NPRM, FinCEN is proposing to amend the effective date of the IA AML Rule  <SU>1</SU> <FTREF/> to delay the obligations of covered investment advisers (covered IAs) from January 1, 2026, to January 1, 2028. <FTNT> <SU>1</SU>   <E T="03">See</E> U.S. Department of the Treasury (Treasury), FinCEN, <E T="03">Anti-Money Laundering/Countering the Financing of Terrorism Program and Suspicious Activity Report Filing Requirements for Registered Investment Advisers and Exempt Reporting Advisers,</E> 89 FR 72156 (Sept. 4, 2024) (IA AML Rule). </FTNT> <HD SOURCE="HD1">II. IA AML Rule</HD> On September 4, 2024, FinCEN published the IA AML Rule, which defined certain investment advisers as “financial institutions” under the Bank Secrecy Act (BSA). <SU>2</SU> <FTREF/> The IA AML Rule requires covered IAs to establish AML/CFT programs, report suspicious activity, and keep relevant records, among other requirements. <SU>3</SU> <FTREF/> In the 2024 Investment Adviser Risk Assessment (IA Risk Assessment), Treasury described the illicit finance risks associated with the investment adviser sector that the IA AML Rule was designed to address, including that investment advisers may be misused by money launderers, terrorist financers, or other actors who seek access to the U.S. financial system for illicit purposes and who threaten U.S. national security. <SU>4</SU> <FTREF/> <FTNT> <SU>2</SU>  Pursuant to FinCEN's authority under the BSA, it may define a business or agency as a “financial institution” if such business or agency “engages in any activity . . . determine[d] by regulation to be an activity which is similar to, related to, or a substitute for any activity” in which a “financial institution” as defined by the BSA is authorized to engage. <E T="03">See</E> 31 U.S.C. 5312(a)(2)(Y). </FTNT> <FTNT> <SU>3</SU>   <E T="03">See</E> IA AML Rule, 89 FR at 72274-78. </FTNT> <FTNT> <SU>4</SU>   <E T="03">See</E> Treasury, <E T="03">2024 Investment Adviser Risk Assessment</E> (Feb. 1, 2024), available at <E T="03">https://home.treasury.gov/system/files/136/US-Sectoral-Illicit-Finance-Risk-Assessment-Investment-Advisers.pdf.</E> </FTNT> <HD SOURCE="HD1">III. Proposed Delay in Effective Date</HD> FinCEN proposes to delay the effective date of the IA AML Rule by two years. The IA AML Rule and all requirements set forth thereunder would therefore be effective on January 1, 2028. FinCEN assesses that delaying the effective date of the IA AML Rule would pose a number of advantages. By delaying the effective date, FinCEN will be afforded an opportunity to review the IA AML Rule and, as applicable, ensure the IA AML Rule is effectively tailored to the diverse business models and risk profiles of types of firms within the investment adviser sector. This review may afford FinCEN an opportunity to reduce any unnecessary or duplicative regulatory burden and ensure the IA AML Rule strikes an appropriate balance between cost and benefit—while still adequately protecting the U.S. financial system and guarding against money laundering, terrorist financing, and other illicit finance risks. FinCEN invites interested parties to submit comments on the proposed delay in the effective date of the IA AML Rule within 30 days of publication of this NPRM. Under Executive Orders (E.O.s) 12866 and 13563, a comment period typically should be at least 60 days, but shorter comment periods are permitted if they suffice to allow the public a meaningful opportunity to comment on the proposed regulation. <SU>5</SU> <FTREF/> A 30-day comment period is appropriate here given both the simplicity of the proposed change and the need to provide regulatory clarity to regulated parties as expeditiously as feasible. <FTNT> <SU>5</SU>  E.O. 12866, <E T="03">Regulatory Planning and Review,</E> 58 FR 51735, 51740 (Oct. 4, 1993); E.O. 13563, <E T="03">Improving Regulation and Regulatory Review,</E> 76 FR 3821 (Jan. 21, 2011). </FTNT> <HD SOURCE="HD1">IV. Regulatory Impact Analysis</HD> FinCEN has analyzed the anticipated economic impacts of this proposed rule to assess its obligations under E.O.s 12866, 13563, and 14192;  <SU>6</SU> <FTREF/> the Regulatory Flexibility Act (RFA);  <SU>7</SU> <FTREF/> the Unfunded Mandates Reform Act (UMRA);  Act (PRA). <SU>9</SU> <FTREF/> The results of this analysis are discussed in the remainder of this section  below. The public is invited to comment on any and all aspects of the analysis, including the data, assumptions, and methodological approaches upon which its conclusions rely. <SU>12</SU> <FTREF/> <FTNT> <SU>6</SU>   <E T="03">See</E> 58 FR at 51740; 76 FR 3821; E.O. 14192, <E T="03">Unleashing Prosperity Through Deregulation,</E> 90 FR 9065 (Feb. 6, 2025). </FTNT> <FTNT> <SU>7</SU>   <E T="03">See generally</E> 5 U.S.C. 601 <E T="03">et seq.</E> </FTNT> <FTNT> <SU>8</SU>  Unfunded Mandates Reform Act of 1995, Public Law 104-4, § 202, 109 Stat. 48, 64 (1995). </FTNT> <FTNT> <SU>9</SU>  Paperwork Reduction Act of 1995, Public Law 104-13, 109 Stat. 163 (1995). </FTNT> <FTNT> <SU>10</SU>   <E T="03">See</E> Section IV.A for analysis responsive to obligations under E.O.s 12866, 13563, and 14192. </FTNT> <FTNT> <SU>11</SU>   <E T="03">See</E> Section V for analysis responsive to obligations under the RFA, PRA, and UMRA. </FTNT> <FTNT> <SU>12</SU>  In particular, FinCEN welcomes comments that provide data, studies, or generalizable qualitative information when modifications to the original analysis are recommended. </FTNT> <HD SOURCE="HD2">A. Economic Considerations</HD> The sum total of the combined economic effects of the proposed rule may be difficult to quantify. <SU>13</SU> <FTREF/> Nevertheless, FinCEN anticipates that the proposed delay could reduce certain direct costs by enabling covered IAs to forgo select compliance-related activities and expenditures  <SU>14</SU> <FTREF/> in calendar years 2026 and 2027. The total dollar value  <SU>15</SU> <FTREF/> of this pro forma cost reduction has been estimated  <SU>16</SU> <FTREF/> to be approximately $1.45 billion dollars. <SU>17</SU> <FTREF/> FinCEN is mindful that estimates of the expected change in costs associated with the proposed rule are sensitive to a number of assumptions about the most appropriate counterfactual baseline and the related methodological approaches employed. <SU>18</SU> <FTREF/> FinCEN is also aware that a change in previously quantified costs may not fully represent the scope of economic effects of the proposed rule. Additional analysis with respect to these issues is included in Section IV.A.b below. <FTNT> <SU>13</SU>  As the proposed rule merely delays the effective date of the IA AML Rule, any potential changes to the scope of the IA AML Rule are outside the scope of this proposed rule and any related economic analysis. </FTNT> <FTNT> <SU>14</SU>  The proposed amendment to delay the effective date would not relieve cove ━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━ Preview showing 10k of 37k characters. Full document text is stored and available for version comparison. ━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━