Compliance reviews of U.S. brokerage firms continue to find shortcomings in anti-money laundering (AML) efforts, the U.S. Securities and Exchange Commission (SEC) reports.
An alert from the SEC’s compliance exam division said regulators continue to find firms that aren’t devoting adequate resources to their AML programs given the volume of business they do and the risks involved.
This resourcing issue “can be exacerbated in the current environment of new and increasing sanctions,” the SEC said, “particularly where the same firm personnel perform both AML and sanctions compliance functions.”
The reviews found that firms’ AML efforts are undermined when controls aren’t implemented consistently, and the regulator highlighted weaknesses in firms’ compliance with the requirement for independent testing of AML controls.
The regulator’s reviews also found weaknesses in brokers’ sanctions compliance programs; in firms’ client identity verification procedures; and in their compliance with customer due diligence and beneficial ownership requirements.
The SEC called on firms to review and strengthen their AML policies, procedures and internal controls in light of the findings.