Open Letter to CEOs of All SEC-Registered, FINRA Member Broker-Dealers
May 12, 2017
January 26, 2012
Dear CEO of SEC-Registered, FINRA Member Broker Dealer:
I am writing to inform you that the Financial Crimes Enforcement Network (“FinCEN”) issued a final rule (effective January 3, 2011) amending the Bank Secrecy Act (“BSA”) regulations regarding the confidentiality of suspicious activity reports (“SARs”).1 FinCEN amended its regulations to, among other things, require a broker-dealer to make SARs and supporting documentation available to any self-regulatory organization (“SRO”) that examines the broker-dealer for compliance with the requirements of 31 C.F.R. § 1023.320 (the “SAR Rule”), upon the request of the SEC.2
In a letter dated January 26, 2012, the SEC requested that all FINRA member broker-dealers make SARs and supporting documentation as well as any information that would reveal the existence of a SAR or any decision to not file a SAR (collectively “SAR Materials”) available to FINRA, either in connection with a FINRA examination or investigation, or in connection with FINRA’s risk assessment effort within its examination program. To obtain additional information, please review the SEC’s letter to FINRA.3
The SEC’s letter to FINRA reminds FINRA of its responsibilities under the BSA and the SAR Rule to preserve the confidentiality of SAR Materials. The letter also emphasizes that the SEC expects FINRA to implement the SEC’s request to broker-dealers in accordance with the SAR Rule. Broker-dealers may contact SEC staff via the SEC SAR Alert Message Line at 202-551-SARS (7277) should they have any concerns regarding FINRA’s implementation of the SEC’s request.
For additional information on FinCEN’s Final Rule and FinCEN’s Advisory FIN-2010-A014 (issued November 23, 2010), please refer to http://www.fincen.gov/news_room/nr/html/20101122.html .
Very truly yours,
Carlo di Florio,
1 Financial Crimes Enforcement Network: Confidentiality of Suspicious Activity Reports, 31 C.F.R. § 1023.320 (formerly 31 C.F.R. § 103.19), http://edocket.access.gpo.gov/2010/pdf/2010-29869.pdf . Effective March 1, 2011, FinCEN reorganized the BSA’s implementing regulations into a new chapter within title 31. As part of this reorganization, FinCEN moved the regulations reflected in 31 C.F.R. Part 103 into 31 CFR Chapter X. See 75 Fed. Reg. 65,806 (October 26, 2010).
2 See Department of Treasury Release, Financial Crimes Enforcement Network: Confidentiality of Suspicious Activity Reports, 75 Fed. Reg. 75,593 at 75,597 (Dec. 3, 2010).
3 SEC Letter to FINRA: Implementation of the SEC’s Request to SEC-Registered FINRA Member Broker-Dealers at www.sec.gov .