The Financial Crimes Enforcement Network (“FinCEN”) issued a final rule (the “Final Rule”) that will amend the definition of “financial institution” in FinCEN’s regulations, which is less inclusive than the definition in the Bank Secrecy Act itself, to include mutual funds. One consequence of the rule is that mutual funds will be subject to an obligation to report large currency transactions on currency transaction reports (“CTRs”) rather than Form 8300. The requirements for CTRs are somewhat different that the filing requirements for Form 8300; for example, “currency” for purposes of the CTR requirement includes only cash, while Form 8300 applies to transactions involving certain cash-like instruments, such as travelers’ checks and money orders. Another result of the rule amendment is that mutual funds will become subject to the so-called “Recordkeeping and Travel Rule,” which will require mutual funds to create and retain records and include certain information (such as the name and address of the transmitter, date and amount of the transmittal order, and identity of the recipient’s financial institution) in the transmittal order for wire transfers and other transmittals of funds in amounts of $3,000 or more, subject to certain exceptions. The new reporting requirements will take effect 30 days after their publication in the Federal Register, while the recordkeeping requirements will only take effect 270 days after their publication in the Federal Register. A broader discussion of the Final Rule will appear in next week’s Alert.
Alert April 13, 2010