Dual registrant regulatory roundup - September 2024 | Eversheds Sutherland ( US ) LLP

The Regulatory Roundup for August highlights significant developments in the regulatory landscape for broker-dealer and investment adviser firms. FINRA updated its members on crypto asset activities, identifying common activities and potential regulatory challenges. The update emphasized the importance of due diligence, disclosure, and anti-money laundering (AML) programs in crypto asset-related activities. In a separate development, a US District Court blocked Missouri s anti-ESG rules for broker-dealers and investment advisers, citing First Amendment violations and preemption by federal laws. This decision may impact future state regulatory efforts. Additionally, FinCEN issued a final rule to subject certain registered investment advisers (RIAs) and exempt reporting advisers (ERAs) to anti-money laundering (AML) requirements. The rule mandates RIAs and ERAs to implement AML/CFT programs, file reports, keep records, and fulfill other obligations applicable to financial institutions subject to the Bank Secrecy Act (BSA). The compliance date for the final rule is January 1, 2026. FINRA also introduced thematic reviews, a new type of exam focusing on specific business areas or products with heightened risk. These reviews aim to compare and contrast firms controls and procedures, allowing FINRA to observe best practices and potentially issue future regulatory notices and guidance. FINRA has already conducted thematic reviews on off-channel communications, net capital, communications with the public, and broker-rankings. These developments underscore the evolving regulatory environment for broker-dealer and investment adviser firms, particularly in the areas of crypto assets, ESG considerations, and AML compliance. Firms must stay informed and adapt their practices to meet these regulatory requirements.

Source: jdsupra.com
Published on 2024-09-11