On April 4, 2016, FinCEN announced a proposal to amend the Bank Secrecy Act (“BSA”) definition of broker-dealers to include “funding portals,” that is, online crowdfunding platforms involved in offering or selling securities.
The rule is not yet final; the comment period is open until June 3, 2016. If adopted, however, funding portals would be required to comply with the full array of BSA requirements applicable to broker-dealers, including implementing and maintaining effective anti-money laundering and anti-terrorist financing (“AML/CFT”) controls, developing and implementing an effective AML/CFT compliance program, maintaining certain customer and transaction records, and reporting suspicious transactions to the government.
Nicole S. Healy (Ropers Majeski Kohn and Bentley), author of PLI’s Anti-Money Laundering Deskbook provides a summary of the proposed new rule and its potential impact on funding portals. Download the report here or find it in the table of contents for Anti-Money Laundering Deskbook.