SEC Extends BD No-Action Relief until IA AML Program Rule Implementation Date

The SEC Division of Trading and Markets ("Division") extended its no-action position permitting broker-dealers to rely on registered investment advisers to fulfill customer identification and beneficial ownership obligations under the Bank Secrecy Act.

According to the letter, the relief allows broker-dealers to treat investment advisers as if they were subject to an anti-money laundering program rule, provided the reliance continues under the specific conditions established in prior correspondence. That prior relief —originally granted in 2004— was intended to remain in place until anti-money laundering rules for investment advisers were adopted.

FinCEN finalized the "IA AML Program Rule" on August 28, 2024, however, the implementation timeline was delayed with a current effective date of January 1, 2028. In light of this extension, the Division determined that continuing the existing relief is necessary to maintain regulatory consistency, allowing broker-dealers to rely on investment advisers for CIP and beneficial ownership compliance throughout the prolonged implementation period.

The current no-action position now aligns with the implementation timeline.