Private Equity has been siting on the fringes of
Anti-money laundering regulation for many years. It's still illegal to be
involved in money laundering and fund managers should be taking some steps to
protect themselves and to identify problems. There's just no set script. FinCEN
is supposedly working on a new rule.
In the meantime, FinCEn has issued a new rule setting out
the requirements for Non-Bank Mortgage Lenders and Originators.
The rule starts with a simple principle based approach:
Each loan or finance company shall develop and implement
a written anti-
money laundering program that is reasonably designed to prevent the loan or
finance company from being used to facilitate money laundering or the
financing of terrorist activities.
What do you have to do to meet this standard? The rule
goes on to set minimum requirements:
(1) Incorporate policies, procedures, and internal
controls based upon the company's assessment of the money laundering and
terrorist financing risks associated with its products and services.
(2) Designate a compliance officer who will be responsible for ensuring that:
(i) The anti-money laundering program is implemented effectively
(ii) The anti-money laundering program is updated as necessary; and
(iii) Appropriate persons are educated and trained
(3) Provide for on-going training of appropriate persons
concerning their responsibilities under the program.
(4) Provide for independent testing to monitor and maintain an adequate
program, including testing to determine compliance of the company's agents and
brokers with their obligations under the program
The mortgage company is also now explicitly
required to file suspicious activity reports.
Obviously, private equity firms are not subject to this
rule. However, I would guess that the proposed rule for private equity will end
up having many of these same elements.
additional commentary on developments in compliance and ethics, visit Compliance Building,
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The Anti Money laundering is mostly going to financial field, and banking site also, In the both site it has a big root.
This is a good start to the topic. As mentioned, for mortgage lenders, there must be a compliance program that is followed and someone has to be named an AML Compliance Officer, see AML mortgage compliance for videos and more information on what exactly the AML compliance program must contain and what the duties of the Compliance Officer will be.