ADISA appreciated the opportunity to comment on the Proposal by the SEC and the U.S. Treasury’s Financial Crimes Enforcement Network (FinCEN) to effectively require investment advisers registered with the SEC, as well as so-called “exempt reporting advisers,” to adopt customer identification procedures (CIPs).

ADISA is supportive of regulatory initiatives designed to facilitate the prevention, detection and prosecution of international money laundering and the financing of terrorism. However, ADISA believes that certain aspects of the Proposal are unnecessarily broad and burdensome and, potentially, imprecise and unworkable, including:

1. Reach of Proposed Definition of “Account”

   
   and

2. Delegation

ADISA believes the Proposal would impose significant costs on investment advisers without unnecessarily advancing the goals of the Assessment. ADISA does not believe that the SEC and FinCEN have supposed sufficient evidence on why advisory businesses that do not hold assets should be covered under this Proposal, have articulated the benefit to be gained from having CIPs applied to accounts that are private funds or non-custodial in nature, or have justified an overbroad and overly exacting approach to delegation.

The letter was drafted by ADISA’s Legislative & Regulatory Committee Co-Chairs John Grady, ABR Dynamic Funds, and Catherine Bowman, The Bowman Law Firm. It was signed by ADISA’s 2024 President Jade Miller, Bourne Financial Group.

Read the letter in its entirety here.