Recent CFTC AML Compliance Warning
On July 6, 2016, the U.S. Commodity Futures Trading Commission's ("CFTC") Division of Swap Dealer and Intermediary Oversight issued an Advisory to remind Futures Commission Merchants ("FCM") and Introducing Brokers ("IB") of their compliance obligations to report suspicious activities to the Financial Crimes Enforcement Network ("FinCen"), a bureau of the U.S. Department of the Treasury. The Advisory reminds all CFTC registrants of their obligations regarding sanctions programs administered by the Office of Foreign Assets Control ("OFAC") against certain countries, groups and individuals.
Suspicious Activity Reporting ("SAR") regulation requires all FCMs, IBs and other registrants to file a SAR with FinCen relevant to any possible violation of law or regulation. Transactions potentially requiring a submission of an SAR report are transactions either made or attempted to be made by, at, or through an FCM or IB, involves or aggregates funds or other assets of at least $5,000 and the FCM or IB knows, suspects, or has reason to suspect that transaction:
1. involves funds derived from illegal activity or is potentially intended to hide or disguise funds or assets derived from illegal activity; 2. is designed to evade the Bank Secrecy Act or its implementing regulations; 3. has no apparent business or lawful purpose or is typically not the sort of transaction in which the particular customer would normally be expected to be engaged in, and the FCM or IB knows of no reasonable explanation for the transaction after examining the available facts, including the background and possible purpose of the transaction; or 4. involves use of the FCM or IB to facilitate criminal activity.
SARs are required to be filed no later than 30 calendar days after the date the suspicious activity is initially detected unless no subject is identified.
To read the CFTC Press Release, please click on the link below:
To read the CFTC Staff Advisory, please click on the link below:
If you have any questions about the Alert, please contact Daniel G. Viola at 212.573.8038 or firstname.lastname@example.org.