BSA requirements for investment advisors defined as ‘financial institutions’ under 2024 rule delayed to 2028

An exemptive relief order for investment advisors (IAs) covered by a September 2024 final rule imposing Bank Secrecy Act (BSA) anti-money laundering (AML) program requirements was issued Tuesday and will remain in effect until Jan. 1, 2028, Treasury’s financial crimes enforcement network said Tuesday.

The exemptive order was issued while FinCEN reviews the 2024 rule with the Trump administration’s deregulatory bent in mind. It said the Treasury secretary, through FinCEN, “has determined that the IA AML Rule should be reviewed to ensure it strikes an appropriate balance between cost and benefit.”

The Financial Crimes Enforcement Network (FinCEN) issued the 2024 final rule, titled “Anti-Money Laundering/Countering the Financing of Terrorism Program and Suspicious Activity Report Filing Requirements for Registered Investment Advisers and Exempt Reporting Advisers,” with an effective date of Jan. 1, 2026. FinCEN said it plans to issue a proposal with a new effective date for the rule “no earlier than January 1, 2028,” the order states.

FinCEN said the Sept. 4, 2024, final rule defined certain investment advisers as “financial institutions” under BSA, requiring covered investment advisers to establish and maintain anti-money laundering/countering the financing of terrorism (AML/CFT) programs, report suspicious activity, and keep relevant records, among other requirements. The rule addresses illicit finance risks, including that investment advisers may be misused by money launderers, terrorist financers, or other actors who seek access to the U.S. financial system for illicit purposes and who threaten U.S. national security, the order states.

“While the illicit finance risks associated with investment advisers remain, this review will allow FinCEN to ensure the IA AML Rule is consistent with the Administration’s deregulatory agenda and  is effectively tailored to the diverse business models and risk profiles of the investment adviser sector – while still adequately protecting the U.S. financial system and guarding against money laundering, terrorist financing, and other illicit finance risks,” it states.

In the meantime, Tuesday’s exemptive relief will apply “to all financial institutions that meet the definition of ‘investment adviser’ set out” in the 2024 final rule, it said.

Exemptive Relief Order to Delay the Effective Date of the Investment Adviser Rule