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  • 3011. Anti-Money Laundering Compliance Program

    SR-FINRA-2009-039 has been approved by the SEC. Effective January 1, 2010, this rule will no longer be applicable. Please consult the appropriate FINRA rule.

    On or before April 24, 2002, each member shall develop and implement a written anti-money laundering program reasonably designed to achieve and monitor the member's compliance with the requirements of the Bank Secrecy Act (31 U.S.C. 5311, et seq.), and the implementing regulations promulgated thereunder by the Department of the Treasury. Each member's anti-money laundering program must be approved, in writing, by a member of senior management. The anti-money laundering programs required by this Rule shall, at a minimum,
    (a) Establish and implement policies and procedures that can be reasonably expected to detect and cause the reporting of transactions required under 31 U.S.C. 5318(g) and the implementing regulations thereunder;

    (b) Establish and implement policies, procedures, and internal controls reasonably designed to achieve compliance with the Bank Secrecy Act and the implementing regulations thereunder;

    (c) Provide for annual (on a calendar-year basis) independent testing for compliance to be conducted by member personnel or by a qualified outside party, unless the member does not execute transactions for customers or otherwise hold customer accounts or act as an introducing broker with respect to customer accounts (e.g., engages solely in proprietary trading or conducts business only with other broker-dealers), in which case such "independent testing" is required every two years (on a calendar-year basis);

    (d) Designate and identify to NASD (by name, title, mailing address, e-mail address, telephone number, and facsimile number) an individual or individuals responsible for implementing and monitoring the day-to-day operations and internal controls of the program (such individual or individuals must be an associated person of the member) and provide prompt notification to NASD regarding any change in such designation(s); and

    (e) Provide ongoing training for appropriate personnel.

    Amended by SR-NASD-2005-066 eff. Mar. 6, 2006.
    Amended by SR-NASD-2002-146 eff. Oct. 22, 2002.
    Adopted by SR-NASD-2002-24 eff. April 24, 2002.

    Selected Notices: 02-21, 02-50, 02-78, 02-80, 03-34, 06-07.

    • IM-3011-1. Independent Testing Requirements

      SR-FINRA-2009-039 has been approved by the SEC. Effective January 1, 2010, this rule will no longer be applicable. Please consult the appropriate FINRA rule.

      (a) All members should undertake more frequent testing than required if circumstances warrant.
      (b) Independent testing, pursuant to Rule 3011(c), must be conducted by a designated person with a working knowledge of applicable requirements under the Bank Secrecy Act and its implementing regulations.
      (c) Independent testing may not be conducted by:
      (1) a person who performs the functions being tested,
      (2) the designated anti-money laundering compliance person, or
      (3) a person who reports to a person described in either (1) or (2) above, except that a member may allow the test to be conducted by a person who reports to a person described in (1) or (2) above if all four of the following conditions are met:
      (A) the member has no other qualified internal personnel to conduct the test;
      (B) the member establishes written policies and procedures to address conflicts that may arise from allowing the test to be conducted by a person who reports to the person(s) whose activities he or she is testing (e.g., anti-retaliation procedures);
      (C) to the extent possible, the person conducting the test reports the results of the test to a person at the member who is senior to the persons described in (1) or (2) above; and
      (D) the member must document its rationale, which must be reasonable, for determining that it has no other alternative than to comply in the manner set forth in the exception to this paragraph (3). In addition, if the person does not report the results consistent with (C) above, the member must document a reasonable explanation for not doing so.
      Adopted by SR-NASD-2005-066 eff. Mar. 6, 2006.

      Selected Notice: 06-07.

    • IM-3011-2. Review of Anti-Money Laundering Compliance Person Information

      SR-FINRA-2009-039 has been approved by the SEC. Effective January 1, 2010, this rule will no longer be applicable. Please consult the appropriate FINRA rule.

      Each member must identify, review, and, if necessary, update the information regarding its anti-money laundering compliance person designated pursuant to Rule 3011(d) in the manner prescribed by Rule 1160.
      Amended by SR-NASD-2007-034 eff. Dec. 31, 2007.
      Adopted by SR-NASD-2005-066 eff. Mar. 6, 2006.

      Selected Notices: 06-07, 07-42.