AML monitoring: New York regulator gets prescriptive

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July 2016

Overview

The New York State Department of Financial Services (NYDFS) issued its final rule on June 30th requiring either senior officers or the board of directors to certify the effectiveness of anti-money laundering (AML) and Office of Foreign Assets Control (OFAC) transaction monitoring and filtering programs.

The final rule differs in several critical ways from an earlier version of the rule NYDFS proposed in December of last year. Most notably, the final rule removed the provision stipulating potential “criminal penalties” for incorrect or falsified certification filings.

Nevertheless, the rule will challenge institutions as it represents the first time a regulator has provided a prescriptive regulation regarding institutions’ transaction monitoring and watch list filtering programs.

This Financial crimes observer analyzes the regulation's five most impactful elements and provides our view of what institutions should do now.

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