The USA Patriot Act of 2001, section 352, requires NFA Member futures commission merchants (FCMs), brokers (IBs) and NASD broker/dealer firms to have anti-money laundering (AML) compliance programs in place as of April 24, 2002. For your convenience we'd like to highlight the important elements of AML compliance requirements, and explain how our training programs and audit/consulting services can fully meet all requirements of the CFTC, SEC, NFA and NASD.
In summary, the USA Patriot Act of 2001 requires the following:
Development of Policies, Procedures and Controls
Every firm must have a written AML Policy and Procedures Statement. This Statement must cover your firm's internal policies, procedures, and controls in place to prevent potential money laundering activities. This Statement should provide information about what the consequences are if an employee does not follow the firm's AML policy, as well as which senior management in the firm is responsible for written approval of the firm's AML program.
Most large firms have a written Policy and Procedure document in place already. While your firm should have a plan which meets your needs, we have a prototype (or template) Policy and Procedures document as an example.
Designation of a Compliance Officer
At each firm at least one person must be designated as the "AML Compliance Officer", and who has the responsibility to oversee your firm's AML program. This person should have the authority to ensure that your firm meets all federal and regulatory requirements under the Patriot Act.
Ongoing Employee Training Program
All regulated financial institutions must provide ongoing education and training programs on at least an annual basis. The training must cover your firm's policies and procedures, and relevant federal laws and regulatory AML requirements. Records should be maintained which provide evidence that such training was accomplished by your employees.
Online AML training programs are available immediately on demand through Exchange Analytics Inc., the world's largest provider of compliance training programs to the derivatives industry. Exchange Analytics provides training to most of the world's largest financial firms. Please click here to read more about Exchange Analytics AML courses.
Independent Audit Function to Test AML Programs
Regulated financial institutions must conduct annual testing of their AML compliance program. This testing can be done by the firm's personnel (e.g. internal audit staff) who are independent of the employees working in areas that are exposed to potential money laundering risks, or by engaging an outside party with experience in this type of audit. The results of this audit should be documented and reported to the firm’s senior management or internal audit committee.