Treasury department issues new broker/dealer regulations

On December 20, 2001, the Department of the Treasury proposed regulations to implement provisions of the International Money Laundering Abatement and Anti-Terrorist Financing Act of 2001. The proposed regulations are intended to require broker/dealers to report suspicious transactions and to clarify application of IMLA's new recordkeeping requirements and "shell bank" prohibitions to broker/dealers and other financial institutions. IMLA and the proposed regulations, however, do not distinguish between full-service and limited-purpose broker/dealers. As non-compliance with IMLA and the proposed regulations could result in substantial civil and criminal penalties, it is imperative that all broker/dealers prepare to comply with their expanded obligations.