Regulatory Framework: Anti-Money Laundering and Compliance

22.1 Regulatory Framework

The regulatory framework for anti-money laundering (AML) and compliance is a critical component of the financial industry’s efforts to combat illegal activities such as money laundering and terrorist financing. This framework is built upon a series of legislative acts and regulations that establish the responsibilities and obligations of financial institutions. Understanding these regulations is essential for those preparing for the Series 7 Exam, as it ensures compliance and the protection of the financial system’s integrity.

Introduction to Anti-Money Laundering Regulations

Anti-money laundering regulations are designed to prevent criminals from disguising illegally obtained funds as legitimate income. These regulations are crucial for maintaining the integrity of the financial system and preventing the financing of terrorism. The primary legislative acts that form the backbone of the AML regulatory framework in the United States include the Bank Secrecy Act (BSA), the USA PATRIOT Act, and various regulations enforced by the Financial Crimes Enforcement Network (FinCEN).

Key Legislative Acts

Bank Secrecy Act (BSA)

The Bank Secrecy Act, enacted in 1970, is the cornerstone of the U.S. AML regulatory framework. It requires financial institutions to maintain records of

In this section

• Bank Secrecy Act (BSA) and Anti-Money Laundering Compliance
  Explore the Bank Secrecy Act (BSA), the cornerstone of anti-money laundering compliance in the U.S. securities industry. Understand key provisions, reporting requirements, and practical applications for the Series 7 Exam.
• USA PATRIOT Act: Expanding Anti-Money Laundering Compliance
  Explore the USA PATRIOT Act's impact on anti-money laundering regulations, emphasizing customer identification and due diligence requirements for securities professionals.