FinCEN Postpones New AML Rule for Investment Advisers

On July 21, 2025, the US Department of the Treasury’s Financial Crimes Enforcement Network (FinCEN) announced that it intends to postpone the effective date of the final rule concerning the Anti-Money Laundering/Countering the Financing of Terrorism Program and Suspicious Activity Report Filing Requirements for Registered Investment Advisers and Exempt Reporting Advisers (the AML Rule).

FinCEN anticipates delaying the effective date of the AML Rule from January 1, 2026, to January 1, 2028 and revisiting the scope of the AML Rule at a future date. The postponement provides welcome relief to advisers who would have been subject to the new rule requirements as of January 1, 2026.

FinCEN indicated that additional time is needed to align the AML Rule with broader AML priorities under the Bank Secrecy Act and to reassess its scope to address priorities and industry needs. This effort aims to balance costs and benefits by tailoring the AML Rule to diverse adviser models and ensuring manageable compliance costs.

During the delayed effective date, FinCEN intends to revisit the substance of the AML Rule through a future rulemaking process and, together with the Securities and Exchange Commission, “also intends to revisit the joint proposed rule establishing customer identification program requirements” for registered investment advisers and exempt reporting advisers, which was originally proposed in May 2024.See Customer Identification Programs for Registered Investment Advisers and Exempt Reporting Advisers, 89 Fed. Reg. 10738 (May 21, 2024), available at https://www.federalregister.gov/documents/2024/05/21/2024-10738/customer-identification-programs-for-registered-investment-advisers-and-exempt-reporting-advisers.

This delay is consistent with a broader trend that has been observed across federal agencies in the last several months. For example, in recent weeks, the SEC has withdrawn several proposed rulemakings, including proposals related to predictive data analytics, safeguarding advisory client assets, enhanced ESG disclosures, outsourcing by investment advisers, and amendments to the Form PF reporting regime. FinCEN’s decision to postpone the effective date for the AML Rule appears to reflect a similar recalibration, giving regulators more time to reassess timing, scope, and industry impact.

Key Takeaways

In the interim, advisers should consider taking measured steps to prepare for what could still be ahead:

• Continue to monitor developments and anticipate potential requirements, including customer due diligence, suspicious activity reporting, and independent testing

• Assess current AML practices (e.g., investor onboarding, fund flows, and service provider oversight) to ensure they meet expected regulatory standards
• Periodically review disclosures, including Form ADV and fund offering documents, to ensure they accurately reflect the adviser’s current AML and investor screening practices, and avoid boilerplate claims that suggest more comprehensive oversight than is currently in place

If you have questions about this Client Alert, please contact a member of our Investment Funds — Regulatory Strategy team or Investment Funds Practice, or the Latham lawyer with whom you normally consult.