The Securities and Exchange Commission (SEC) has proposed a rule that would require investment advisers to implement reasonable procedures to verify the identity of their customers [00f87338]. Currently, investment advisers are not subject to obligations to have a program dedicated to anti-money laundering or countering the financing of terrorism (AML/CFT). The proposed rule aims to fill this gap by subjecting investment advisers to similar regulatory obligations as other market participants [00f87338].
The proposed rule would require investment advisers to establish, document, and maintain a written customer identification program (CIP) as part of an AML/CFT program. This program would include procedures for verifying the identity of customers to prevent criminal enterprises and sanctions evaders from using investment advisers to access the U.S. financial system [00f87338].
The SEC's proposed rule has garnered support from Better Markets, a non-profit organization. They believe that the rule is essential to prevent money laundering, terrorist financing, and sanctions evasion. Better Markets emphasizes the need for comprehensive AML/CFT policies to ensure the integrity of the financial system and prevent illicit financial activity [00f87338].