Insights

Historically, SEC-registered investment advisers have not been subject to comprehensive AML regulation under the Bank Secrecy Act (“BSA”) unless they also qualify as a broker-dealer or other BSA-regulated financial institution. Notwithstanding the absence of a formal requirement to date, many SEC-registered investment advisers have voluntarily adopted AML programs in line with industry expectations and investor demands. However, on August 28, 2024, FinCEN issued its Final Rule, establishing anti-money laundering/countering the financing of terrorism (“AML/CFT”) requirements for Covered Advisers similar to those that apply to broker-dealers. The Final Rule, which was scheduled to take effect on January 1, 2026, required Covered Advisers to maintain written AML programs, perform customer due diligence, file Suspicious Activity Reports (“SARs”) and other reports required of BSA-regulated financial institutions, and retain standard AML records.  

Since December of last year, the status of the CTA has been in a state of perpetual flux, following a dizzying series of federal court rulings and FinCEN announcements. On February 28, 2025, we reported that FinCEN paused enforcement actions for entities required to report under the CTA’s Beneficial Ownership Information Reporting Rule (BOI Rule) until FinCEN issued an interim final rule providing new guidance regarding the BOI Rule’s requirements and associated deadlines. Then, on March 2, 2025, Treasury went a step further, indicating that it would altogether cease enforcement against U.S. citizens and domestic reporting companies for violations of the BOI Rule, explaining that it would instead issue proposed rulemaking to narrow the scope of the BOI Rule to “foreign reporting companies” only and set new reporting deadlines. 

On February 28, 2025, we reported that the Department of the Treasury’s Financial Crimes Enforcement Network (FinCEN) paused enforcement actions for entities required to report under the CTA’s BOI Rule (Reporting Companies) for failure to file or update beneficial ownership information (BOI) reports by a previously-announced March 21, 2025, deadline. FinCEN had explained that the pause would last until it issued an interim final rule further updating reporting deadlines and providing new guidance around the BOI Rule’s requirements.