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Feedback will probably be accepted till April 15.
Primarily based on an preliminary evaluation, the Funding Adviser Affiliation in Washington “is anxious that the sweeping proposal, which can seize just about all funding advisers no matter threat or gaps within the present framework, is not going to accomplish this as a result of it lacks enough tailoring to the distinctive enterprise fashions and threat profiles of funding advisers,” Gail Bernstein, the group’s basic counsel, informed ThinkAdvisor Tuesday in an e-mail. “Including these sweeping and duplicative necessities might unnecessarily burden advisers with out offering important further profit.”
Treasury additionally revealed Tuesday its threat evaluation of funding advisors, “which identifies illicit finance threats and vulnerabilities within the sector, together with how the uneven software of AML/CFT necessities throughout the sector permits each official and illicit traders to ‘store round’ for an adviser who doesn’t must inquire into their supply of wealth.”
Funding advisors “are necessary gatekeepers to the American economic system, overseeing the funding of tens of trillions of {dollars},” FinCEN Director Andrea Gacki stated Tuesday in an announcement.
“The present patchwork of AML/CFT necessities creates regulatory gaps that criminals and overseas adversaries exploit to launder cash, disguise illicit wealth, and compromise American innovation. This proposed rule would degree the regulatory taking part in subject, shield U.S. financial and nationwide safety, and safeguard American companies,” Gacki stated.
IAA, in response to Bernstein, is anxious that Treasury’s Danger Evaluation “is pulling into the AML bucket dangers which can be distinct from AML and illicit financing.”
As an example, “it displays that fraud is a essential driver for the proposal,” Bernstein stated. Funding advisors “already adjust to broad anti-fraud rules and are required to implement applications designed to detect and stop fraudulent exercise, and the SEC has and workouts broad enforcement authority.”
The IAA urges Treasury “to develop a tailor-made strategy that successfully addresses particular dangers whereas avoiding pointless regulatory burdens, particularly burdens on smaller funding advisers,” Bernstein added.
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