Regulatory Alerts2002-09-26
Added
Anti-Money Laundering Programs for Unregistered Investment Companies
FinCEN proposes to amend Bank Secrecy Act regulations to require certain unregistered investment companies, including hedge funds, private equity funds, venture capital funds, commodity pools, and real estate investment trusts, to establish anti-money laundering programs. The proposed rule defines covered entities as those that would be investment companies under the Investment Company Act of 1940 but for specific exclusions, or that operate as commodity pools or primarily invest in real estate. To be included, an entity must permit investors to redeem their interests within two years of investment and generally must have at least $1,000,000 in assets. The proposal seeks to apply minimum standards for internal policies, compliance officers, employee training, and independent audits to these entities to prevent money laundering and terrorist financing.