US Broker Dealers Revamp AML Programs Ahead of Customer Due-Diligence Rule

By Daniel Bethencourt

Pending requirements that U.S. financial institutions more thoroughly vet their accountholders may especially challenge broker dealers, some of which are designing new systems to scrutinize investment advisers and others who control omnibus accounts and pooled investment vehicles, say sources. Set to take effect in May 2018, the U.S. Treasury Department's customer due-diligence rule will explicitly require that covered financial institutions take reasonable steps to identify persons owning 25 percent or more of firms that open accounts and verify the accuracy of data they receive, particularly from companies and other legal entities considered high-risk for money laundering and other financial crimes....