FINRA Adds Customer Due Diligence Requirements To AML Rule

FINRA amended its anti-money laundering ("AML") policy to specifically require ongoing customer due diligence. These amendments will be implemented, along with comparable requirements under Customer Due Diligence Requirements for Financial Institutions (the "CDD Rule"), by the Financial Crimes Enforcement Network ("FinCEN") on May 11, 2018.

As previously covered, the amendment to Rule 3310 was proposed by FINRA following FinCEN's adoption of the CDD Rule. These requirements, FINRA noted, are "not new and merely codify existing expectations for firms." FINRA urged firms to update their AML programs to comply with the rule amendments.

The amendment to Rule 3310 will require member firms' written AML programs to include (i) understanding the nature and purpose of customer relationships in developing a customer risk profile, and (ii) conducting ongoing monitoring to identify and report suspicious transactions and to maintain and update customer information.