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ARTICLE · 29 AUGUST 2023

SEC Exam Staff Issues Alert Highlighting Deficiencies In Broker-Dealers' AML Programs

McDermott Will & Schulte
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On July 31, 2023, the staff of the US Securities and Exchange Commission's ("Commission") Division of Examinations ("Exam Staff") issued a risk alert ("Alert") highlighting various deficiencies...

United StatesGovernment, Public Sector
Betty Santangelo
Betty Santangelo
Melissa G.R. Goldstein
Melissa G.R. Goldstein
Julian Rainero
Julian Rainero
Kristopher J. Kendall
Kristopher J. Kendall
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On July 31, 2023, the staff of the US Securities and Exchange Commission's ("Commission") Division of Examinations ("Exam Staff") issued a risk alert ("Alert") highlighting various deficiencies in the anti-money laundering ("AML") programs of certain broker-dealers during the most recent SEC examination cycle.1 The Alert highlights the Exam Staff's observations regarding inadequacies in broker-dealers' AML programs, including with respect to compliance with independent testing and training requirements, as well as inadequacies relating to implementation of the broker-dealers' customer identification program ("CIP") and procedures relating to the customer due diligence ("CDD") requirement.2 The Alert reminds broker-dealers of the Exam Staff's previous guidance3 regarding the requirement to implement adequate policies and procedures related to identifying suspicious activity and filing suspicious activity reports ("SARs") timely.4

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