ACTION REQUESTED
[15564]
January 17, 2003
TO: MONEY LAUNDERING RULES WORKING GROUP No. 5-03
TRANSFER AGENT ADVISORY COMMITTEE No. 6-03
RE: DRAFT LETTER TO TREASURY AML TASK FORCE
As some of you may know, the Department of the Treasury has formed an interagency
task force to look back at the Patriot Act and the regulations adopted thus far pursuant to it.
Treasury staff involved with the Task Force met with staff of the Institute in late December and
invited us to make recommendations on ways in which the Patriot Act and the regulations that
have been adopted pursuant to it with respect to mutual funds might be improved to be more
effective at preventing money laundering, less burdensome on mutual fund complexes, or both.
Attached for your review is a draft of the Institute’s letter to the Task Force. The draft
letter makes three sets of recommendations:
• Mutual Fund Complexes. To make it easier for mutual fund complexes to
take a uniform approach to AML compliance, we recommend a system of
limited conditional exemptions that would tie compliance for all entities
within the fund complex to the mutual fund rules.
• Intermediaries. The proposed letter notes that a number of issues remain
with respect to intermediaries, but focuses on one: the “assessment of the
viability” language in the interim final mutual fund AML program rule. The
draft letter reiterates the Institute’s request that Treasury clarify that mutual
funds are not required to assess the viability of intermediaries’ AML
programs.
• Conflicts of Law. The draft letter notes the potential conflicts of law between
the Patriot Act and other laws, and in particular, a potential conflict between
the collection and verification of information under the CIP rule and the Fair
Credit Reporting Act. The proposed letter recommends two alternative
approaches, including the adoption of a safe harbor under the CIP rule.
2
A conference call for the MLRWG and the TAAC already has been scheduled for January 30,
2003, to discuss the proposed mutual fund SAR rule. We would like to use that call to discuss
this letter as well as the proposed mutual fund SAR rule.
If you would like to register for that conference call and have not done so already, please use
the response form sent earlier this week.1
We also would encourage you to provide any comments on the attached draft prior to the
conference call by contacting me by phone at (202) 371-5430 or by email at rcg@ici.org.
Robert C. Grohowski
Associate Counsel
Attachment (in .pdf format)
1 Memorandum to Money Laundering Rules Working Group No. 4-03 and Transfer Agent Advisory Committee No.
5-03, dated January 16, 2003.