Congress moves to kill anti-money laundering rules for investment advisers
H.J.Res. 56 — Providing for congressional disapproval under chapter 8 of title 5, United States Code, of the rule submitted by the Financial Crimes Enforcement Network relating to "Anti-Money Laundering/Countering the Financing of Terrorism Program and Suspicious Activity Report Filing Requirements for Registered Investment Advisers and Exempt Reporting Advisers". · Filed by Andrew Clyde (R-GA) · Introduced Feb 12, 2025 · Referred to committee
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What it does
This resolution disapproves a Financial Crimes Enforcement Network (FinCEN) rule that would require registered investment advisers and exempt reporting advisers to implement anti-money laundering and counter-terrorism financing programs and file suspicious activity reports. If passed, the rule would be nullified and have no legal effect, eliminating these compliance obligations for investment advisers.
Why we flagged it
The bill's operative mechanism is a Congressional Review Act disapproval that nullifies a regulatory rule imposing anti-money laundering and counter-terrorism financing obligations on investment advisers. This is straightforward deregulation of financial compliance requirements.
What the text implies
- Investment advisers would no longer be required to file Suspicious Activity Reports (SARs), eliminating a key data source for law enforcement investigating financial crimes and terrorist financing.
- The rule elimination removes AML/CFT program requirements (policies, procedures, training, compliance officers) for advisers managing client assets, potentially creating regulatory arbitrage where illicit funds flow to less-regulated investment channels.
The full analysis lists 4 implications of this text.
Who stands to gain
registered investment advisers; exempt reporting advisers; investment advisory firms