SEC Staff Extends No-Action Relief for Broker-Dealer AML Reliance on IAs

The staff of the SEC Division of Trading and Markets extended its no-action position allowing broker-dealers to rely on registered investment advisers to fulfill their obligations under the customer identification program ("CIP Rule") and the portion of the customer due diligence rule regarding beneficial ownership requirements for legal entity customers. The position, which was originally issued in 2004 and was last extended in 2022, has now been extended until January 1, 2026.

In the letter, the SEC's Division of Trading and Markets is allowing broker-dealers to treat registered investment advisers as if they are subject to an anti-money laundering ("AML") program rule under the Bank Secrecy Act for purposes of the CIP rule. The relief remains effective until January 1, 2026, when FinCEN's new AML program rule for investment advisers takes effect.