Anti Money Laundering Compliance for Private Funds


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Essay #: 067115
Total text length is 26,049 characters (approximately 18.0 pages).

Excerpts from the Paper

The beginning:
Anti Money Laundering Compliance for Private Funds
All private or hedge fund advisers that register with the Securities and Exchange Commission will have to document their policies and procedures designed to prevent money laundering. Although advisers are not required by law to have anti-money-laundering (AML) programs, SEC examiners can ask about advisers' policies and procedures during inspections. The Treasury Department's Financial Crimes Enforcement Network (FinCEN) proposed AML provisions for advisers in April 2003, but has indicated that it will likely not pursue the regulation of private funds and money managers. See 68 FR 25149 (2003). While the rules were never finalized, some of the elements of the proposed rules could be useful...
The end:
.....ervice-related, or client-related. However, regardless of where those risks arise, financial institutions designated by Treasury should take reasonable steps to mitigate those risks. FinCEN Insurance AML and SAR FAQs at 4.
Thus even though private equity and hedge funds, and their managers, are not legally required to implement formal AML programs, market pressures and legal considerations that may not be direct AML regulations, such as criminal laws and Office of Foreign Asset Control Regulations, dictate that private funds implement AML policies and procedures. The use of outside consultants and computer software can simplify the process of instituting the procedures, and once in place, the procedures will become de rigeur in the company.