Alert June 09, 2009

FinCEN Proposes Changes Requiring Mutual Funds to File CTRs

The Financial Crimes Enforcement Network (“FinCEN”) issued a proposal (the “Proposal”), which, if adopted, would “streamline” the Bank Secrecy Act (“BSA”) filing requirements applicable to mutual funds that receive greater than $10,000 in currency. 

Mutual funds currently file IRS/FinCEN Form 8300 - Report of Cash Payments Over $10,000 Received in a Trade or Business (“Form 8300”) for the receipt of more than $10,000 in “currency.”  This filing requirement applies to the receipt of not only cash and coins, but also cashier’s checks, bank drafts, traveler’s checks and money orders in face amounts of $10,000 or less. 

The Proposal, if adopted, would require mutual funds to file FinCEN Form 104, Currency Transaction Report (“CTR”) rather than Form 8300 for the receipt of more than $10,000 in currency.  For the purposes of the CTR filing requirement, “currency” is defined to include coin and cash, but not cashier’s checks, bank drafts, traveler’s checks, money orders, and other similar monetary instruments.  The ultimate result of the Proposal, if adopted, is that mutual funds would be freed from having to report certain transactions involving monetary instruments.  

Comments on the Proposal are due by September 3, 2009.