The Financial Industry Regulatory Authority issued an advisory to members calling their attention to important information about the reporting requirements for suspicious activity.
FINRA sent the notification to highlight answers to frequently asked questions (FAQs) that were issued earlier this month by the U.S. Department of Treasury’s Financial Crimes Enforcement Network (FinCEN) related to suspicious activity reports (SARs). The FAQs are aimed at clarifying regulatory requirements to help financial institutions with their compliance obligations. They were issued jointly with the Board of Governors of the Federal Reserve System, the Federal Deposit Insurance Corporation, the National Credit Union Administration, and the Office of the Comptroller of the Currency.
A financial institution is required to file a suspicious activity report no later than 30 calendar days after the date of initial detection of facts that may constitute a basis for filing such a report. The reports are filed with FinCEN by financial institutions to report suspected money laundering, fraud, or other illegal activities.
FinCEN said the FAQs were released to ensure financial institutions are not needlessly expending resources on efforts that do not provide law enforcement and national security agencies with the critical information they need to detect, combat, and deter criminal activity.
“SARs should deliver better outcomes by providing law enforcement the most useful information—not by overwhelming the system with noise,” said Under Secretary for Terrorism and Financial Intelligence John K. Hurley. “Compliance requires real resources, and that’s why prioritization is crucial. At Treasury, we will continue to reform our Anti-Money Laundering and Countering the Financing of Terrorism framework to de-prioritize low-value activity and direct compliance resources towards the most significant threats to our country.”
FINRA said the FAQs address whether a financial institution is required to file a SAR for a transaction or a series of transactions with a value at or near the currency transaction reporting threshold; whether a financial institution is required to conduct a review of a customer or account following the filing of a SAR to determine whether suspicious activity has continued, and the timeline for SAR filings for financial institutions that elect to do so; and whether a financial institution is required to document the decision not to file a SAR. FinCEN stated that “[t]he answers to these FAQs do not alter existing BSA [Bank Secrecy Act] legal or regulatory requirements or establish new supervisory expectations.”
A list of the questions and answers can be found here.
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