Anti-Money Laundering Compliance Program
To comply with the PATRIOT Act, FINRA designed a new rule directing its member firms to design and implement written policies, procedures, and internal controls consistent with the following reporting and recordkeeping requirements:
- • To record cash purchases of negotiable instruments between $3,000 and $10,000 in a Monetary Instrument Log (MIL) and to maintain these records for a minimum of five years.
- • To report to the IRS any cash transactions in a single day exceeding $10,000, whether conducted in one transaction or several smaller ones, using FinCEN’s Currency Transaction Report.
- • To file a Suspicious Activity Report (SAR) on any client who appears to be avoiding Bank Security Act reporting requirements or is behaving in a way that suggests money laundering or some other illegal activity. Member firms and their employees are prohibited from disclosing to anyone involved in the suspicious activity that it has been reported.
Suspicious Activity Reports must be filled out whenever a client makes a transaction in excess of $5,000 and the broker-dealer knows or suspects foul play, specifically if the transaction seems to have:
- • Arisen from illegal activity or