Originally Published in Investment Services Advisor - February 2002
Money Laundering
On October 26, 2001, President Bush signed the USA Patriot Act. On December 28, 2001, the Treasury Department issued proposed regulations under the USA Patriot Act to (1) require broker-dealers (including mutual fund distributors) to report suspicious transactions by their customers to the Financial Crimes Enforcement Network; (2) prohibit U.S. financial institutions from providing correspondent accounts to foreign shell banks; and (3) require "nonfinancial trades or business" (which may include some transfer agents) to report certain currency transactions.
Broker/Dealer Suspicious Activity Reports.
Under the proposal, registered broker-dealers would be obligated to report any customer transaction (or attempted transaction) involving at least $5,000 that:
