AML Services

AML Independent Testing and COVID-19

Many firms may be wondering what to do about the annual independent test of your AML program amidst all the stay at home orders. Last week FINRA issued some guidance in its FAQs. We have listed that guidance below:

Q: My firm performed its annual independent AML testing in April 2019, but I’m concerned about the firm performing its next annual testing by April 2020.
A: FINRA is reminding member firms that they have until December 31, 2020 to perform the annual independent testing of the member’s AML compliance program. FINRA Rule 3310’s reference to a “calendar-year basis” means that, for most member firms, the independent testing must be performed at least once during each calendar year (i.e., between January 1 and December 31). This provides member firms with the ability to choose when to perform their independent testing within the calendar year, unless circumstances warrant more frequent testing.
Member firms that do not execute transactions for customers or otherwise hold customer accounts or do not act as introducing brokers with respect to customer accounts (e.g., engage solely in proprietary trading or conduct business only with other broker-dealers), may perform independent testing every two years (on a calendar-year basis) rather than on an annual basis. If a member firm qualifies for the two-year testing exception, and the last year in which an independent test was performed was in 2018, the member firm has until December 31, 2020 to perform its next independent testing.

Q: What can Cobia do to assist my firm if we wish to go ahead and get started with our testing?
A: Cobia utilizes Sharefile for secure file sharing and can provide document request lists and access to upload your information remotely. Depending on the lines of business you conduct, the entire process may be able to be done remotely for 2020. For more information, please contact me at rhonda.davis@cobiacompliance.com

Independent Anti-Money Laundering Reviews

Engaging Cobia Compliance to conduct your AML audit will give you confidence that your firm is in compliance with your industry’s AML requirements as well other federal regulations such as the Bank Secrecy Act and USA PATRIOT Act. Cobia guarantees that at least one Cobia associate on site at every audit will hold the CAMS (Certified Anti-Money Laundering Specialist) credential.

Does Your Last Independent AML Review Meet FINRA’s New Standards?

FINRA Rule 3310(c) requires each broker-dealer to have independent testing of its AML program on a calendar year basis. Such testing is to be conducted by a qualified outside party unless certain conditions are met. In the last couple of years, FINRA has enhanced its expectations to include transaction and exception testing far in excess of the general Customer Identification Program (CIP) requirements. If your last AML review just included a testing of your CIP documentation, you need to consider engaging Cobia to do a comprehensive review of your AML Program. We utilize the recent SEC and FINRA regulatory actions, current FINRA request lists as well as technology to provide you a complete report. All information is exchanged securely utilizing Citrix Sharefile. To discuss further or to request a proposal please select Contact Us.

Is Your Money Service Business Protected?

A money service business is any business that provides financial services such as: money orders, traveler’s checks, check cashing, currency exchange, stored value products, or money transfer services. If your business provides any of these services you are now required to register with the federal government and have an anti-money laundering compliance program in place. One of the primary aspects of an AML compliance program is an independent AML audit.

We all know that large banks are heavily regulated by federal agencies to protect against money laundering, but did you know that now all money service businesses (MSB) are regulated by many of the same regulations? After the passing of the PATRIOT Act, money service businesses have fallen under similar regulations and requirements. A money service business is any business that provides financial services such as: money orders, traveler’s checks, check cashing, currency exchange, stored value products, or money transfer services. If your business provides any of these services you are now required to register with the federal government and have an anti-money laundering compliance program in place. One of the primary aspects of an AML compliance program is an independent AML audit. These independent audits ensure that your business has a compliance program that incorporates policies, procedures and internal controls which are reasonably designed to assure compliance with the Bank Secrecy Act (BSA). An independent AML audit review will ensure that you have designated a compliance officer who is responsible for day-to-day compliance with the BSA, as well as provide education and training for you business’s personnel regarding compliance.

As with all federal regulations, those that fail to comply will face serious consequences. The Internal Revenue Service (IRS) polices those that fall under these regulations and enforces consequences that can include large fines all the way to imprisonment up to 5 years. All MSBs have only a specific period of time to implement a compliance program and provide the necessary registrations. This is why it is very important for your Money Service Business to have a trusted compliance expert on your side. Cobia Compliance has vast experience in the independent AML audit compliance field. They have created a tailored audit program specifically for Money Service Businesses that will keep your business in compliance in a cost effective manner. You can contact Cobia today for a consultation and take the first step to ensuring your business stays in compliance.

BE PREPARED

CONTACT US TODAY!