On August 28, 2024, the Financial Crimes Enforcement Network (“FinCEN”) issued a final rule (the “Final Rule”)[i] that will significantly impact the obligations of most investment advisers – whether registered or exempt – with respect to anti-money laundering (“AML”) and countering the financing of terrorism (“CFT”). The Final Rule will represent a significant change for many investment advisers as it imposes, for the first time, formal requirements with respect to AML/CFT. Among other obligations, the Final Rule will require investment advisers to adopt an AML/CFT program with an array of specific requirements applicable to the onboarding and ongoing monitoring of investors and clients. FinCEN delegated enforcement power to the Securities and Exchange Commission (the “SEC”) and additional rulemaking is expected with respect to customer identification programs and customer due diligence, which are likely to apply additional compliance requirements to investment advisers. The effective date of this rule is January 1, 2026.
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