On August 28, 2024, the U.S. Department of the Treasury’s Financial Crimes Enforcement Network (“FinCEN”) issued two final rules to counter financial crime and safeguard national security: one broadening the definition of “financial institution” to include certain registered investment advisers (“RIAs”) and exempt reporting advisers (“ERAs”) under the Bank Secrecy Act (“BSA”), and one mandating FinCEN reporting on certain residential real property transfers.
As outlined in more detail below, RIAs and ERAs will need to reevaluate their anti-money laundering (“AML”) risks and revise their compliance programs accordingly as additional scrutiny will be placed upon certain transactions. Real estate experts should also ensure that their clients are in compliance with the new rules.