Broker Dealer AML Independent Testing

Benefits of Broker-Dealer AML
Independent Testing

Regulatory Compliance has professional staff that understands the regulatory requirements relative to
AML testing, as well as the applicable laws that broker-dealers must follow with their AML program. As of part of our testing process, we:

  • review your AML procedures for compliance with applicable rules, regulations and laws;
  • test your processes to ensure the broker-dealer’s adherence to the program; and
  • issue a report that meets the requirements under FINRA 3310 and provide recommendations for remediation of any findings.

How to meet the AML compliance demands – whether it is the regulatory constraints placed on a firm or best practice AML compliance – is a challenge for any size firm. Regulatory Compliance understands these challenges and offers both AML testing (and ongoing AML compliance support to help your firm stay ahead of the regulations. 

Valuable Independent Broker-Dealer
AML Exam Services

The Regulatory Compliance staff is highly qualified
and experienced in conducting broker-dealer AML independent testing. We can help your firm meet its broker-dealer AML compliance exam obligations.

To learn more contact us or call 1-888-Reg-Comp
(1-888-734-2667) to learn more about how our broker-dealer AML compliance exam services can help your firm meet all AML testing requirements.

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Broker-Dealer AML Testing Guidelines

Each FINRA-registered broker-dealer must test the firm’s AML program annually, or every other year if applicable, to assess the adequacy of the written program and to assess the broker-dealer’s compliance with its AML procedures. This testing, which is sometimes referred to as an AML exam or AML Audit, should include the following:

  • Confirm the integrity and accuracy of the AML procedures for the reporting of large currency transactions;
  • Include a review of forms filed with authorities, such as FinCEN Forms 104 (CTR) and 101 (SAR-SF), 4790 (CMIR), etc.;
  • Confirm the integrity and accuracy of your firm’s recordkeeping activities and adherence to in-house record retention policies;
  • Confirm compliance with your firm’s “know your customer” policies by conducting a review of a sampling of new account documentation, account reviews and transaction reviews;
  • Review the AML supervisor’s records as they relate to specific monitoring of transactions or accounts, or follow-up on reported unusual activity;
  • Confirm adherence to your firm’s internal AML reporting procedures;
  • Confirm that all employees have been made aware of the AML program and required signed AML attestations;
  • Include steps necessary to ascertain that your firm is conducting an ongoing AML training program; and
  • Confirm that your firm’s Anti-Money Laundering Compliance Program incorporates changes required as a result of new AML legislation or AML regulation.

The results of AML testing must be presented to a broker-dealer’s senior management to alert them to any deficiencies in the AML program. The broker-dealer should document and take corrective and/or disciplinary action, as each situation warrants. Copies of all AML testing reports of findings and any remedial action taken by a firm must be maintained for a period of no less than five years.

The person conducting the AML testing must be independent from the AML functions within a firm and may not report to the AML Compliance Officer (or “AMLCO”). The person designated to conduct the testing must be qualified by having knowledge of the requirements under FINRA Rule 3310, the Bank Secrecy Act and USA Patriot Act, as well as knowledge of the broker-dealer’s products, services and customer base.

When firms fail to complete required AML testing, they are in violations of FINRA rules as well as the requirement under the Bank Secrecy Act and could be subject to fines and/or other disciplinary actions.