On January 24, 2022, FinCEN issued a Notice of Proposed Rule Making (NPRM) regarding the establishment of a pilot program for financial institutions to share Suspicious Activity Reports (SARs) and related information with foreign branches, subsidiaries, and affiliates. This is required by Section 6212(a) of the Anti-Money Laundering Act of 2020. The NPRM outlines several limitations and standards for such sharing. Comments are due by March 28, 2022.
As you are likely already aware, institutions are generally prohibited from disclosing information contained within a SAR and/or even revealing the existence of a SAR. In 2006, guidance was issued on sharing SARs with head offices and controlling companies along with additional guidance for the securities industry and mutual funds. Again in 2010, there was guidance for depository institutions on sharing SARs with certain U.S. affiliates that are also subject to SAR filing obligations. Any sharing under these present rules requires sufficient internal controls to protect the confidentiality of the SARs. Since the pilot program is related to sharing information with foreign branches and subsidiaries, it brings with it additional concerns that are addressed in the NPRM.
The pilot program would only be temporary but it’s intended to determine whether and how to propose future long-term legislation. In order to participate in the program, a financial institution would need to submit an application identifying, among other things, the purpose(s) for sharing the information and how unauthorized disclosure will be prevented. Participants would also have a quarterly reporting requirement. The NPRM includes a detailed application process with rules and limitations for participants.
Again, comments are due by March 28, 2022, and may be submitted at:
- Federal E-rulemaking Portal: http://www.regulations.gov. Follow the instructions for submitting comments. Refer to Docket Number FINCEN-2022-0002 and RIN 1506-AB51.
Kevin brings years of experience and a unique perspective on regulatory matters to our clients. A self-proclaimed geek and accredited CRCM, Kevin is also a recovering attorney with experience as in-house counsel for a large regional bank and one of the leading national title insurance providers. For reasons unknown, Kevin decided to leave the safety and serenity of his desk job to seek fortune and glory as a wandering adventurer. Like a bank compliance version of Kwai Chang Caine, The Man with No Name or Don Quixote, he now travels the land seeking to help those in need and righting compliance wrongs, wherever he may find them.
Kevin lives in Sioux Falls with his two children, who are surprisingly normal after having endured their father’s vivid imagination for their entire lives. He won’t admit to having any hobbies, because apparently “Regulations never sleep.” (While he does say this in his Batman voice, we’re pretty sure he’s joking.) From the looks of his Facebook page, he likes the outdoors and spending time with his large extended family (who seem like relatively normal people).