July 22, 2025
What happened?
On July 21, 2025, the U.S. Department of the Treasury’s Financial Crimes Enforcement Network (“FinCEN”) announced its intention to postpone the effective date of the AML/CFT Rule from January 1, 2026, until January 1, 2028. FinCEN anticipates reviewing the scope of the rule, “to ensure efficient regulation” noting that it “must be effectively tailored to the diverse business models and risk profiles of the investment adviser sector.” FinCEN also stated that delaying the effective date of the rule may reduce potential compliance costs and uncertainty during the review.
While no details were given, the announcement also stated FinCEN’s intention to revisit the Customer Identification Program Rule (the “AML CIP Rule”) that was jointly proposed with the Securities and Exchange Commission. A new regulation combining the customer due diligence requirements of AML/CFT with the identification and verification requirements of AML CIP could be the type of efficient regulation FinCEN seeks to ensure.
What does this mean for me?
While FinCEN still needs to go through the regulatory process to extend the effective date, it is good to know ahead of time what they intend to do. This gives compliance programs the chance to avoid the costs of implementing an AML/CFT program until necessary. Much time and effort has already been spent on this regulation (see our prior coverage on the final rule, regulatory timeline, and program requirements).
Commenters to the AML/CFT rule asked for it to be delayed until the AML CIP Rule was adopted to allow compliance programs to prepare one comprehensive AML program. It appears that FinCEN intends to grant that wish.
