For the past decade, anti-money laundering (“AML”) has been at the forefront of securities regulators’ priorities. Indeed, AML enforcement cases have resulted in some of the highest fines imposed by securities regulators, and even the most cursory review of SEC and FINRA annual examination priorities letters reveals AML-related concerns in virtually each of them in the past 10 years. Based on recent enforcement actions and regulatory pronouncements, this focus will continue to be top of mind for regulators and, given the relationship between AML and other headline topics, such as cybersecurity and fraud, broker-dealers should anticipate that future examinations and other regulatory inquiries will heavily focus on AML-related issues. Securities regulators continue to emphasize that any reasonable AML program must be risk-based, and firms should consider periodically conducting a 360º assessment of their AML risks (beyond the annual independent AML testing pursuant to FINRA Rule 3310(c)). At bottom, broker-dealers should be aware of, and be nimble in responding to, cybersecurity and other types of fraud-related developments, and be prepared to modify their AML program in light of their own risk assessments and material developments in the regulatory landscape.

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