May 6, 2019

New AML guidance from FINRA

On May 6, 2019, the Financial Industry Regulatory Authority has issued an anti-money laundering program Notice to help firms comply with FINRA Rule 3310 (Anti-Money Laundering Compliance Program).  Rule 3310 requires member firms to implement written AML programs that are reasonably designed to monitor and achieve compliance with the Bank Secrecy Act and BSA implementing regulations, including the filing of Suspicious Activity Reports pursuant to 31 CFR 1023.320, if the transaction entails the participation of a broker-dealer and involves at least $5,000, and the broker-dealer has reason to suspect that the transaction is designed to evade BSA regulations, facilitates or involves funds derived from illegal activity, or appears to have no lawful purpose. 

FINRA’s new guidance is designed to supplement the list of money laundering red flags published in April 2002 in Special NASD Notice to Members 02-21, and to consolidate both publications into one document.  The new guidance details potential red flags that may arise in the context of customer due diligence; interactions with customers; deposits of securities; securities trading; the frequency and structure of transactions to move of money, including foreign currency; insurance products; and other areas of concern such as evasive behavior, unreasonable transactions, and transactions involving amounts incommensurate with the known resources of the customer.