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WASHINGTON (AP) — The Biden administration is introducing new record-keeping rules for U.S. investment advisory firms as part of an ongoing effort to crack down on money laundering, illicit financing and fraud in the U.S. financial system. .
The Treasury Department’s Financial Crimes Enforcement Network (FinCEN) on Tuesday proposed regulations that would require investment advisers to develop anti-money laundering programs and report to the government when they detect suspicious activity by their clients. Proposed.
In a profession rife with regulatory gaps that can be exploited to launder money and hide illicit wealth, the new regulations for investment advisers “level the regulatory playing field and protect the U.S. economy and national security.” and protect American companies,” said FinCEN Director Andrea Gacki. statement.
The proposal follows other recent announcements by the Biden administration targeting financial crimes.
The Treasury Department last week proposed a rule that would require real estate professionals to report to the Treasury Department information about nonfinance sales of residential real estate to corporations, trusts, and shell companies. The risk of money laundering is considered high when purchasing residential real estate all in cash. This rule does not require sales reporting to individuals.
Additionally, the agency has rolled out a new database on small business ownership. The so-called beneficial ownership registry is expected to contain personal information about the owners of at least 32 million U.S. businesses.
Treasury Secretary Janet Yellen said last month that 100,000 companies had signed up for the new database.
The Investment Advisers Rule “will further increase transparency in the U.S. financial system and help law enforcement identify illicit proceeds flowing into the U.S. economy,” FinCEN’s news release said.
The fact sheet states that rules may be strengthened over time, including record-keeping of customer ownership information.
In December 2021, the White House announced plans to prioritize anti-corruption and “increase transparency in our financial systems at home and abroad to prevent authoritarians and thieves from keeping their ill-gotten wealth in the United States.” Ta.
Shortly after this announcement, the Treasury Department conducted a risk assessment that identified instances in which sanctioned individuals, tax evaders, and “other criminals have used investment advisers as an entry point to invest in U.S. securities, real estate, and other assets.” found, the report said. Treasury release.
Treasury said the risk assessment also identified instances in which Chinese and Russian individuals used investment advisers to access sensitive information and emerging technologies.
Public comments on the rule will be accepted until April 15th.
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