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SEC and FinCEN extend customer identification program obligations to IAs

Stamps inside a passport.
Photo: Getty Images/Joseph Sohm

The new rule will require investment advisers to implement procedures to verify the identity of customers and maintain records supporting verification.

The proposed rule strengthens the anti-money-laundering/combating the financing of terrorism (AML/CFT) framework and seeks to prevent illicit finance activity in the investment adviser sector.

The rulemaking follows on from FinCEN’s earlier proposals to designate investment advisers as financial institutions under the Bank Secrecy Act (BSA). The new