AML rules go west: Expect some pain
17.03.2025 – Articles
While fund managers operating in the UK and Europe are well-versed in cumbersome AML and KYC requirements, as the US regulator plays catch-up, stateside adoption is expected to be painful.
“These rules represent a seismic shift,” says Tim Flannery, CEO of Passthrough. “And there’s a broad education issue; people are confused about whether or not the rules apply to them. People will be caught unaware and when the SEC does an exam sweep, those funds will be named and shamed. Expect some pain.”
Why is the US adopting these rules now?
AML rules have been in place as part of the Bank Secrecy Act (BSA), which the 2001 Patriot Act updated to include ‘financial institutions’. However, the definition of financial institutions does not include Registered Investment Advisers (RIAs) or Exempt Report Advisers (ERAs).