FinCEN to propose applying BSA requirements to investment advisers

The Treasury Department’s Financial Crimes Enforcement Network (FinCEN) will propose categorizing investment advisers as financial institutions that must comply with the Bank Secrecy Act (BSA), including having an anti-money laundering (AML) program.

FinCEN issued a notice of proposed rulemaking (NPRM) on Tuesday that would apply to registered investment advisers (RIAs) with the Securities and Exchange Commission, as well as those who report to the SEC as exempted reporting advisers (ERAs).

Private funds advised by RIAs, such as hedge, private equity, and venture capital funds, held approximately $20 trillion in assets under management at the end of 2022, the Treasury said in an investment adviser risk assessment published Tuesday.