SEC releases Anti-Money Laundering guide

The US supervisor, the Security and Exchange Commission (SEC) has launched a new compliance tool to assist the anti-money laundering (AML) compliance preparation in broker-dealer firms. This tool, the "Anti-Money Laundering (AML) Source Tool", takes the form of a detailed guide for American broker-dealers.

US-regulated broker-dealers, and that will include non-US firms which operate in the US markets, despite being governed by the securities self-regulated organisations (SROs), have both statutory and regulatory obligations under two US laws, the Bank Secrecy Act and the, post-9/11, USA Patriot Act. The former laid record keeping and reporting obligations on all including broker-dealers. The latter extended these to include the need for AML compliance and customer identification programs; monitoring, detecting, and filing reports of suspicious activity; due diligence on foreign correspondent accounts, including prohibitions on transactions with foreign shell banks; due diligence on private banking accounts; mandatory information-sharing with law enforcement agencies; and compliance with any "special measures" imposed by the US government.

The guide was originally developed last year by the SEC's Office of Compliance Inspections and Examinations (OCIE) to assist the their own internal staff in examining regulated firms, but it has now been decided to release it to regulated firms and the general public. The guide is a web-based compilation of key AML laws, rules, and guidance applicable to broker-dealers, it organises these in an understandable form and provides links to both original and other material.

"We're hoping that this AML Source Tool will assist broker-dealers with their AML compliance efforts," said Lori Richards, Director of OCIE. "It puts all AML requirements in one easy-to-reference location. While we initially developed the Source Tool for our own SEC examiners, we think it also will be an invaluable reference tool for broker-dealers and their internal AML compliance staff."

The US government has already shown itself to be energetic it the pursuance of money launderers across the globe and is particularly vigilant on the possibility of terrorist and organised crime groups using the established financial markets. This anti-money laundering guide, despite being designed for US firms, should be obligatory reading for all compliance officers wherever they are based.