Delaying the Effective Date of the Anti-Money Laundering/Countering the Financing of Terrorism Program and Suspicious Activity Report Filing Requirements for Registered Investment Advisers and Exempt Reporting Advisers

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<title>Federal Register, Volume 91 Issue 1 (Friday, January 2, 2026)</title>
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[Federal Register Volume 91, Number 1 (Friday, January 2, 2026)]
[Rules and Regulations]
[Pages 36-41]
From the Federal Register Online via the Government Publishing Office [<a href="http://www.gpo.gov">www.gpo.gov</a>]
[FR Doc No: 2025-24184]

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DEPARTMENT OF THE TREASURY

Financial Crimes Enforcement Network

31 CFR Parts 1010 and 1032

RIN 1506-AB58 and 1506-AB69

Delaying the Effective Date of the Anti-Money Laundering/
Countering the Financing of Terrorism Program and Suspicious Activity
Report Filing Requirements for Registered Investment Advisers and
Exempt Reporting Advisers

AGENCY: Financial Crimes Enforcement Network (FinCEN), Treasury.

ACTION: Final rule.

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SUMMARY: FinCEN is amending the Anti-Money Laundering/Countering the
Financing of Terrorism (AML/CFT) Program and Suspicious Activity Report
(SAR) Filing Requirements for Registered Investment Advisers and Exempt
Reporting Advisers (IA AML Rule) to delay the effective date by two
years. As part of this delay, FinCEN is amending the date by which an
investment adviser must develop and implement an AML/CFT program.

DATES: As of December 31, 2025, the effective date of the rule
published September 4, 2024, at 89 FR 72156 is delayed until January 1,
2028. This rule is effective January 1, 2028.

SUPPLEMENTARY INFORMATION:

I. Introduction

In this final rule, FinCEN amends the effective date of the IA AML
Rule \1\ to delay the obligations of covered investment advisers
(covered IAs) under the IA AML Rule from January 1, 2026, to January 1,
2028.
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\1\ See U.S. Department of the Treasury (Treasury), FinCEN,
Anti-Money Laundering/Countering the Financing of Terrorism Program
and Suspicious Activity Report Filing Requirements for Registered
Investment Advisers and Exempt Reporting Advisers, 89 FR 72156
(Sept. 4, 2024).
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II. Background

A. IA AML Rule

On September 4, 2024, FinCEN published the IA AML Rule, which
defines certain investment advisers as ``financial institutions'' under
the Bank Secrecy Act (BSA).\2\ The IA AML Rule requires covered IAs to
establish AML/CFT programs, report suspicious activity, and keep
relevant records, among other requirements.\3\ In the 2024 Investment
Adviser Risk Assessment (IA Risk Assessment), Treasury described the
illicit finance risks associated with the investment adviser sector
that the IA AML Rule was designed to address, including that investment
advisers may be misused by money launderers, terrorist financers, or
other actors who seek access to the U.S. financial system for illicit
purposes and who threaten U.S. national security.\4\
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\2\ Pursuant to FinCEN's authority under the BSA, it may define
a business or agency as a ``financial institution'' if such business
or agency ``engages in any activity . . . determine[d] by regulation
to be an activity which is similar to, related to, or a substitute
for any activity'' in which a ``financial institution'' as defined
by the BSA is authorized to engage. See 31 U.S.C. 5312(a)(2)(Y).
\3\ See IA AML Rule, 89 FR at 72274-78.
\4\ See Treasury, 2024 Investment Adviser Risk Assessment (Feb.
1, 2024), <a href="https://home.treasury.gov/system/files/136/US-Sectoral-Illicit-Finance-Risk-Assessment-Investment-Advisers.pdf">https://home.treasury.gov/system/files/136/US-Sectoral-Illicit-Finance-Risk-Assessment-Investment-Advisers.pdf</a>.
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B. IA AML Effective Date NPRM

On September 22, 2025, FinCEN proposed delaying the effective date
of the IA AML Rule by two years (IA AML Effective Date NPRM) and
amending 31 CFR 1032.210(c) of the IA AML Rule to

[[Page 37]]

reflect this delay.\5\ Under the IA AML Effective Date NPRM, all
requirements set forth under the IA AML Rule were proposed to be
effective on January 1, 2028. In the IA AML Effective Date NPRM, FinCEN
assessed that delaying the effective date of the IA AML Rule would pose
a number of advantages, including providing FinCEN an opportunity to
review the IA AML Rule and, as applicable, ensure the IA AML Rule is
effectively tailored. In response to the IA AML Effective Date NPRM,
FinCEN received 22 comments. Submissions came from a variety of
commenters, including industry trade groups, transparency
organizations, law firms, non-profit organizations, financial advisory
firms, and individual members of the public. Several comment letters
supported the proposed rule, others opposed, and some, while in support
of the proposed rule, raised issues regarding timing considerations in
light of other anticipated future rulemakings. FinCEN also received
comments on topics outside the scope of the IA AML Effective Date NPRM.
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\5\ See Treasury, FinCEN, Delaying the Effective Date of the
Anti-Money Laundering/Countering the Financing of Terrorism Program
and Suspicious Activity Report Filing Requirements for Registered
Investment Advisers and Exempt Reporting Advisers, 90 FR 45361
(Sept. 22, 2025).
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III. Discussion of Comments Received

A. Support for the Delay in Effective Date

Comments received. Several commenters strongly supported the two-
year delay in implementation of the IA AML Rule, citing benefits to
both investment advisers and FinCEN. Specifically, commenters stated
that significant time and resources are needed to establish an AML
compliance program. One of these commenters stated that building a
compliant AML program is a complex, multi-year process that requires
significant planning, budgeting, and coordination. Other commenters
noted that rushing this implementation process will create inefficient
and costly programs. A few commenters stated that delaying the
effective date of the IA AML Rule will provide the time necessary for
FinCEN to provide clarity on the rule in several important respects.
One of these commenters stated that a two-year extension is a
reasonable and appropriate amount of time for FinCEN to tailor the IA
AML Rule to achieve FinCEN's objectives, while reducing where possible
duplication and burden when there is little or no corresponding
benefit. Another commenter stated that clarity is necessary for the
industry to implement the requirements of IA AML Rule by January 1,
2028, and to reduce unnecessary costs without forgoing the intended
benefits of the rule. This commenter explained that delaying the
effective date will provide FinCEN with time to issue the guidance
necessary to efficiently and effectively implement the IA AML Rule, in
particular the application of the Section 312 special due diligence
requirements, sharing of Suspicious Activity Report (SAR) filings among
affiliates, and Section 314(b) information sharing.
Final rule. FinCEN has carefully considered commenters' views and
agrees that delaying the effective date of the IA AML Rule from January
1, 2026, to January 1, 2028, is appropriate. The two-year delay will
provide additional time for FinCEN to review the IA AML Rule and, as
applicable, ensure the IA AML Rule is effectively tailored to the
diverse business models and risk profiles of types of firms within the
investment adviser sector. Delaying the effective date will also
provide investment advisers more time to come into compliance with the
rule upon the revised effective date. FinCEN therefore adopts 31 CFR
1032.210(c) as proposed and extends the effective date of the IA AML
Rule from January 1, 2026, until January 1, 2028.

B. Timing Considerations in Light of Other Rulemakings

Comments received. Several commenters that supported the two-year
delay in implementation of the IA AML Rule expressed concern with
regard to the timing of the potential revisions to the scope of the IA
AML Rule and other rulemakings related to the IA sector, in particular
the IA Customer Identification Program (CIP) rulemaking. Several
commenters recommended that FinCEN reissue the IA CIP NPRM and IA AML
NPRM concurrently to allow covered IAs to consider them in tandem and
develop holistic, risk-based compliance programs.
Final rule. FinCEN has carefully considered each comment related to
the timing of the potential revisions to the scope of the IA AML Rule
and the timing of other rulemakings related to the IA sector and
understands the concerns raised given the interrelatedness of the
rulemakings. FinCEN intends to consider these timing issues during the
rulemaking processes for any future IA-related rules to ensure
appropriate coordination efforts and to reduce unnecessary costs and
uncertainty.

C. Opposition to the Delay in Effective Date

Comments received. Several comment letters strongly opposed the
two-year delay in effective date. Commenters from transparency
organizations were especially concerned about the heightened risk of
illicit finance if the IA AML Rule is delayed, and disputed the
assertion that the current implementation date of January 1, 2026,
provides insufficient time for compliance. Some commenters stated that
the proposed delay in the implementation and enforcement of the IA AML
Rule will have serious and measurable costs for U.S. national security
and public safety, global leadership, and private-sector stability. In
particular, these commenters noted that gaps in U.S. AML coverage might
be exploited by sanctioned actors, terrorist organizations, corrupt
officials, and foreign adversaries, and argued that the longer these
gaps remain, the more exploitation will occur. Some commenters stated
that the current timeline already provides a sufficient implementation
period, explaining that the IA AML Rule was finalized in 2024 with an
effective date of January 1, 2026, and that there has been nearly two
years of lead time, which they believe is more than adequate for
investment advisers to design, test, and implement robust compliance
programs. These commenters noted that many advisers already maintain
elements of AML/CFT compliance, particularly those affiliated with
broker-dealers, banks, or other financial institutions subject to
existing AML requirements. The commenters argued that the proposed
extension would therefore not materially improve industry readiness.
Final rule. FinCEN has carefully considered each comment in
opposition to delaying the effective date of the IA AML Rule. As
explained in the IA AML Effective Date NPRM, FinCEN is mindful that
delaying the effective date may prolong the U.S. financial system's
potential exposure to previously identified vulnerabilities and illicit
finance risks associated with the IA sector. However, consistent with
the Administration's deregulatory policies focused on reducing any
unnecessary or duplicative regulatory burden on Americans, the
Secretary, through FinCEN, has determined that the IA AML Rule should
be reviewed to ensure it strikes an appropriate balance between cost
and benefit. While the illicit finance risks associated with investment
advisers remain, this review will allow FinCEN to ensure the IA AML
Rule is consistent with the

[[Page 38]]

Administration's deregulatory agenda and is effectively tailored to the
diverse business models and risk profiles of the investment adviser
sector--while still adequately protecting the U.S. financial system and
guarding against money laundering, terrorist financing, and other
illicit finance risks. FinCEN also recognizes that extending the
effective date of the rule may help ease potential compliance costs for
industry and reduce regulatory uncertainty while FinCEN undertakes a
broader review of the IA AML Rule.
FinCEN has therefore declined to make any changes to the proposed
effective date and retains the two-year extension to January 1, 2028.

D. Other Issues Raised by Commenters

Comments received. Commenters raised several issues that were not
relevant to the IA AML Effective Date NPRM. Some explained why they
believe registered investment advisers (RIAs) generally have limited
control over client transactions. Other commenters provided reasons why
the scope of investment advisers subject to the IA AML Rule should be
narrowed. Some commenters recommended that FinCEN clarify certain
aspects of the rule, in particular the scope of advisory services,
reliance on third parties, risk-based AML/CFT program application,
special due diligence for correspondent and private banking accounts,
SAR filing obligations, SAR sharing and confidentiality, and funds
transfer and travel rules.
Final Rule. FinCEN has reviewed the comments on issues that are not
relevant to the IA AML Effective Date NPRM and is not adopting changes
to this final rule as a result of these comments.

IV. Regulatory Impact Analysis

FinCEN has analyzed the anticipated economic impacts of this final
rule as required under E.O. 12866, 13563, and 14192; \6\ the Regulatory
Flexibility Act (RFA); \7\ the Unfunded Mandates Reform Act (UMRA); \8\
the Paperwork Reduction Act (PRA); \9\ and the Congressional Review Act
(CRA).\10\ The results of this analysis are discussed in the remainder
of this section \11\ and Section V \12\ below.
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\6\ See E.O. 12866, Regulatory Planning and Review, 58 FR 51735
(Oct. 4, 1993); E.O. 13563, Improving Regulation and Regulatory
Review, 76 FR 3821 (Jan. 21, 2011); E.O. 14192, Unleashing
Prosperity Through Deregulation, 90 FR 9065 (Feb. 6, 2025).
\7\ See generally 5 U.S.C. 601 et seq.
\8\ Public Law 104-4, 202, 109 Stat. 48, 64 (1995).
\9\ Paperwork Reduction Act of 1995, Public Law 104-13, 109
Stat. 163 (1995).
\10\ 5 U.S.C. 801-808.
\11\ See Section IV.A for analysis responsive to obligations
under E.O. 12866, 13563, and 14192.
\12\ See Section V for analysis responsive to obligations under
the RFA, PRA, and UMRA.
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A. Economic Considerations

The sum total of the combined economic effects of the final rule
remains difficult to meaningfully quantify.\13\ Nevertheless, FinCEN
anticipates that the two-year delay could reduce certain direct costs
by enabling covered IAs to forgo select compliance-related activities
and expenditures \14\ in calendar years 2026 and 2027. The total dollar
value \15\ of this pro forma cost reduction has been estimated \16\ to
be approximately $1.45 billion dollars.\17\ While FinCEN received
comment letters in response to the IA AML Effective Date NPRM that
referred to this cost estimate, no comments provided actionable
suggestions, data, or anecdotal evidence that would suggest the
agency's analysis contained substantive miscalculations requiring
revision. FinCEN is therefore retaining, without modification, the
estimates in its original analysis of the expected change in pro-forma
costs in this final rule.
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\13\ As this final rule merely delays the effective date of the
IA AML Rule, any potential changes to the scope of the IA AML Rule
are outside the scope of this rule and any related economic
analysis.
\14\ The proposed amendment to delay the effective date would
not relieve covered IAs of BSA obligations that predate the
effective date of the IA AML Rule, if any, or other obligations
under the Investment Advisers Act of 1940 (15 U.S.C. 80b-1 et seq.)
(Advisers Act) with a regulatory nexus, if any. Therefore,
expenditures on activities undertaken that also satisfy those
obligations would not be considered affected by the proposed
amendment.
\15\ As expected to accrue to covered IAs, select customers, and
the federal government, estimated in 2022-value. See IA AML Rule, 89
FR at 72209-74.
\16\ See IA AML Rule, 89 FR at 72243, Table 5.26.
\17\ Id. The IA AML Rule originally projected aggregate expenses
of $800 million in 2026 and $780 million in 2027 in 2022 U.S. dollar
value. These expenditures were removed from the ten-year time series
of anticipated costs and the remaining eight-year series discounted
at a seven percent rate to estimate the expected cost savings of the
proposed rule, including a two-year upfront delay. The choice to
remove costs originally scheduled to accrue in years three (2026)
and four (2027) of the forecast model of costs reflects the way in
which start-up costs were originally built into the first three
years of the estimates.
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1. Baseline Updates
Since the publication of the IA AML Rule, the annual baseline
population has incurred a net increase of 335 \18\ expected covered
IAs, of which six \19\ are expected to be definitionally small.\20\
FinCEN additionally estimates that there would be an increase in the
total baseline population of covered IAs' expected customers of
approximately 10.2 million \21\ or 20.4 million \22\ that would not
have been taken into account at the time of the IA AML Rule's initial
publication. Of these projected new customers, for purposes of
comparison to the IA AML Rule PRA baseline customers, approximately 1.5
million or 1.8 million would be expected to incur the information
collection burden originally assigned to legal entities in the IA AML
Rule PRA analysis,\23\ which represents an increase of approximately
241,849 or 483,699 expected respondents in 2026 or 2028,
respectively.\24\
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\18\ This estimate is based on the assumption that the
proportion of new covered RIAs that would not qualify for an
exemption has remained the same as in the IA AML Rule (approximately
91.4 percent). Data on the number of investment advisers (including
15,870 RIAs and 5,743 exempt reporting advisers) as of calendar year
end 2024 was obtained from Industry Statistics--Investment Adviser
Association 2025, <a href="https://www.investmentadviser.org/industry-snapshots/">https://www.investmentadviser.org/industry-snapshots/</a> (accessed Aug. 15, 2025). Since the publication of the IA
AML Rule, the number of covered RIAs increased by 438 and the number
of ERAs decreased by 103.
\19\ This estimate is based on the assumption that the
proportion of new covered IAs that would be considered small for
purposes of Regulatory Flexibility Analysis has remained the same as
in the IA AML Rule (approximately 1.9 percent). See IA AML Rule, 89
FR at 72216, 72255-61.
\20\ The IA AML Rule relies on the small entity definition under
the Advisers Act rule adopted for purposes of the RFA. See IA AML
Rule, 89 FR at 72255-56.
\21\ This estimate is derived from applying two years of the
respective expected annual growth rates from the IA AML Rule
regulatory impact analysis (IA AML Rule RIA) (9.5 percent per year
for individuals and legal entities, 6 percent for pooled investment
vehicles (PIVs)) to the baseline population of customers implied by
Table 5.7 and Table 5.15. The IA AML Rule uses the term
``customers'' for those natural and legal persons who enter into an
advisory relationship with an investment adviser. This is consistent
with terminology in the BSA and FinCEN's implementing regulations.
FinCEN acknowledges that the Advisers Act and its implementing
regulations primarily use the term ``clients,'' and so that term is
used in specific reference to Advisers Act requirements; otherwise
the term ``customers'' is used.
\22\ This estimate is derived from applying four years of the
respective expected annual growth rates from the IA AML Rule RIA
(9.5 percent per year for individuals and legal entities, 6 percent
for PIVs) to the baseline population of customers implied by Table
5.7 and Table 5.15.
\23\ In the IA AML Rule RIA, FinCEN assigned an expected
information collection-related burden to the legal entity customers
of covered IAs with limited baseline AML/CFT measures.
\24\ These estimates reflect an applied annual average expected
increase of 9.5 percent for two (four) years to the affected
baseline population of affected legal entities. FinCEN notes that
this growth rate exceeds the observed annual average growth in total
(asset management only) RIA customers as reported in the IA 2025
snapshot (see supra note 34, Table 2B) over calendar years 2018-
2024, which was approximately 8.1 (6.5) percent. To the extent that
the growth rates estimated in the IA AML Rule exceed the realized
growth rate in customer population for the majority of covered IAs,
this would attenuate the expected impact of a delayed effective date
on the increase in up-front or start-up costs.

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2. Expected Benefits and Costs
If the effect of the final rule is conservatively interpreted to be
strictly a shift by two years of a cost profile that would otherwise
continue into all future time periods, then the rule's primary effect
on economic benefits and costs would generally be attributable to the
unrealized costs in 2026 and 2027 and the forgone benefits the
implemented regulations would have otherwise provided in those two
years.\25\ This implies substantial savings in 2026 and 2027, cost
increases associated with delayed ramp-up in 2028, and minor effects
starting in 2029. Applying discount rates of seven and three percent
over a ten-year period, the net present value of the anticipated cost
savings are approximately $1,453.63 million and $1,523.60 million,
respectively. This corresponds to annualized savings of $183.01 million
at a seven percent discount rate and $153.06 million at a three percent
discount rate.\26\ FinCEN recognizes, however, that this
conceptualization of costs may not fully account for costs or benefits
of compliance with other regulations that implement AML/CFT program and
SAR filing requirements.
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\25\ See supra note 5, Section IV.B.
\26\ FinCEN expects that some aspects of this and other
estimates of cost reductions could be overstated because they do not
take into account that some expenditures assigned to effective year
1 have already occurred and are not reversible or would not be cost-
free to reverse. For example, to the extent that a covered IA may
have already reviewed their current policies and procedures to
assess the need for revisions (i.e., gap analysis) or already
undertaken steps to modify those policies and procedures
accordingly, the cost savings of regulatory delay would be
overestimated. Similarly, if it would become necessary to
retroactively conform representations to covered IAs' customers
about an IA's AML/CFT related policies and procedures where
disclosure materials have already been updated, but implementation
would be paused by the proposed delay, the estimated changes in
costs presented here would not include this newly introduced
potential retrofitting cost and would consequently overstate the
reduced burden proportionately. Cost reductions may further be
overstated to the extent that covered IAs opt to commence voluntary
compliance with AML/CFT program requirements in advance of the
proposed delayed effective date.
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3. Alternatives
In partial fulfillment of its obligations under statutory
authorities, FinCEN considered several alternatives to the final rule
amendment.
a. Status Quo
FinCEN is mindful that the proposed amendment to delay the
effective date may prolong the U.S. financial system's exposure to
previously identified vulnerabilities and illicit finance risks
associated with the investment adviser sector.\27\ At the same time,
the IA AML Rule imposes costs that, given other concurrent regulatory
changes and uncertainties, may now be higher than those identifiable at
the time of the IA AML Rule's initial promulgation. FinCEN has weighed
these potential costs to covered IAs, their customers, and the federal
government against the previously identified risks and assesses that,
in contrast to maintaining the status quo effective date of January 1,
2026, a two-year delay more appropriately balances trade-offs between
probable risks and costs.
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\27\ See supra note 4.
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b. Other Alternatives
FinCEN considered other approaches to limiting the near-term costs
incurred by covered IAs and their customers while operationalizing the
IA AML Rule. FinCEN considered proposing a delayed effective date that
would be connected with, or conditioned on, the effective date of one
or more other rules that may impact the regulatory obligations of
covered IAs. However, FinCEN concluded that delaying in a manner that
is conditional on other regulatory effective dates may lead to
uncertainty and have less than the desired magnitude of impact in
reducing costs and, as a result, the costs of the potential harms from
this approach outweigh those associated with a two-year delay.
In addition, when a rule may potentially affect small entities with
greater relative economic impact, it is customary to consider potential
accommodations for them, like additional time to conduct the full suite
of changes to daily operations necessary for compliance. At the same
time, the agency must consider if such accommodations would
meaningfully benefit small entities without unduly undermining the
objectives that necessitated regulation. In connection with this rule,
FinCEN considered affording an additional year delay to covered IAs
that would qualify as ``small'' under the categories defined by the
RFA.\28\ As in the IA AML Rule, FinCEN again concluded that any
alternative that affords differential compliance requirements is not
appropriate at this time.\29\ Moreover, FinCEN estimated that to
successfully implement a regime that requires recorded documentation
that one or more parties meet the eligibility criteria for a temporary
waiver of requirements is unlikely to be substantially less costly than
the alternative compliance regime, and thus both would not meaningfully
reduce costs and would unequivocally reduce the expected benefits
relative to the proposed rule. For these reasons FinCEN did not elect
to propose or afford additional time to affected small entities.
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\28\ See 5 U.S.C. 601(3)-(6).
\29\ See IA AML Rule, 89 FR at 72260-61.
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B. Executive Orders 12866, 13563, and 14192

This rule was deemed ``Economically Significant'' by the Office of
Management and Budget's (OMB's) Office of Information and Regulatory
Affairs (OIRA) because it meets the criteria at E.O. 12866 subsection
3(f)(1).\30\ Accordingly, the forgoing analysis was conducted because
it is expected to result in effects beyond this threshold.
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\30\ Per E.O. 12866, if a regulatory action is expected to
result in a rule that would have an annual effect on the economy
equal to or greater than $100 million (see 58 FR at 51740-41; 76 FR
at 3822.), a regulatory impact analysis is required.
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This action is considered an E.O. 14192 deregulatory action,\31\
estimated to generate $88.88 million in annualized cost savings at a 7
percent discount rate when discounted relative to year 2024, over a
perpetual time horizon.
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\31\ See OMB, Guidance Implementing Section 3 of Executive Order
14192, Titled ``Unleashing Prosperity Through Deregulation,'' M-25-
20 (Mar. 26, 2025), Q4 (``What is a `E.O. 14192 deregulatory action'
''), available at <a href="https://www.whitehouse.gov/wp-content/uploads/2025/02/M-25-20-Guidance-Implementing-Section-3-of-Executive-Order-14192-Titled-Unleashing-Prosperity-Through-Deregulation.pdf">https://www.whitehouse.gov/wp-content/uploads/2025/02/M-25-20-Guidance-Implementing-Section-3-of-Executive-Order-14192-Titled-Unleashing-Prosperity-Through-Deregulation.pdf</a>.
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V. Compliance With Other Authorities

A. Regulatory Flexibility Act

Pursuant to the RFA, FinCEN certifies that the final rule will not
have a significant economic impact on a substantial number of small
entities, and consequently that further analysis under the RFA is not
necessary.\32\
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\32\ See 5 U.S.C. 605.
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Based on the analysis in the IA AML Rule, small covered IAs
constitute less than two percent of the population of covered IAs.\33\
Furthermore, using numbers from the updated baseline in this notice in
addition to the IA AML Rule RIA, FinCEN continues to estimate that
small covered IAs constitute less than three percent of small
investment advisers (small IAs).\34\ Therefore, even if

[[Page 40]]

all the small IAs affected by the proposed rule were conclusively
determined to be significantly impacted, they would still fall short by
a full order of magnitude of comprising a ``substantial number'' either
as a percentage of the total population of covered IAs or as a
percentage of the total population of small IAs.
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\33\ Small covered IAs were estimated to constitute
approximately 1.9 percent of covered IAs in the IA AML Rule. IA AML
Rule, 89 FR at 72216.
\34\ The updated baseline population of small covered IAs is
estimated to be 391 (385 from the IA AML Rule RIA baseline + 6 from
the NPRM baseline). See IA AML Rule, 89 FR at 77215-16. The IA AML
Rule estimated that the total population of small IAs was 13,430 in
2023, meaning at the time the IA AML Rule was originally published
the proportion of small covered IAs was approximately 2.9 percent of
all small IAs. FinCEN estimates that because 391/13,430 is also
approximately 2.9 percent and that any expected increase in the
total population of small IAs since 2023 would have the effect of
increasing the denominator (lowering the ratio of covered small IAs
to all small IAs), it may reasonably continue to expect that the
proportion of small IAs affected by this NPRM remains near or below
three percent.
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Certain commenters expressed concern that FinCEN's analysis uses an
inappropriate threshold to define small IAs. FinCEN considered these
arguments, but for reasons previously discussed in greater detail,\35\
does not believe that using the commenters' proposed definition is
appropriate at this time, particularly as part of a rulemaking that
only delays implementation of IA AML Rule by two years.\36\
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\35\ 89 FR at 72255.
\36\ Election to make use of an alternative definition of
``small'' for purposes of RFA analysis generally requires rulemaking
that is subject to notice and comment, a process that would, by
nature of the time necessary to complete, delay the IA AML Effective
Date rulemaking beyond the effective date it would delay.
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B. Paperwork Reduction Act

The substance of this rule pertains to amending the IA AML Rule
exclusively with respect to the effective date. The PRA analysis in the
IA AML Rule was originally constructed to be generally insensitive to
potential changes in the timing of implementation.\37\ As such, there
is no incremental PRA burden associated with this final rule, and no
modifications to previous burden estimates are required.
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\37\ See IA AML Rule, 89 FR at 72261-74.
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C. Unfunded Mandates Reform Act

Pursuant to the UMRA, FinCEN considered whether the final rule is
likely to result in an incremental expenditure of $187 million or more
annually by State, local, and Tribal governments or by the private
sector in any given year.\38\ As in the IA AML Effective Date NPRM,
FinCEN maintains that further analysis under the UMRA is not
required.\39\
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\38\ The U.S. Bureau of Economic Analysis reported the annual
value of the gross domestic product (GDP) deflator in 1995 (the year
in which UMRA was enacted) as 66.939, and 2024 as 125.230. See U.S.
Bureau of Economic Analysis, ``Table 1.1.9. Implicit Price Deflators
for Gross Domestic Product'' (accessed Aug. 20, 2025). Thus, the
inflation adjusted estimate for $100 million is 125.230 divided by
66.939, multiplied by 100, or $187.080 million.
\39\ Pursuant to 2 U.S.C. 1532.202(c), ``[a]ny agency may
prepare any statement required under subsection (a) in conjunction
with or as a part of any other statement or analysis, provided that
the statement or analysis satisfies the provisions of subsection
(a).'' FinCEN intends for the analysis provided in Section IV to
satisfy the requirements in 2 U.S.C. 1532.202(a).
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One commenter expressed concern about how FinCEN reached that
conclusion. The commenter suggested that FinCEN considered only the
near-term expenditure decreases a delayed effective date would provide
and did not account for how those expenditures might instead accrue in
a later year. As explained in the IA AML Effective Date NPRM, FinCEN's
expenditure estimates are not limited to any particular year, but
rather account for potential costs associated with both rule
implementation and ongoing compliance whenever the IA AML Rule takes
effect. Consequently, FinCEN declines to reconsider its UMRA
determination.

VI. Effective Date

This rule is effective upon publication in the Federal Register.
The original effective date of the IA AML Rule was January 1, 2026,
which is fewer than 30 days after this rule's publication in the
Federal Register. Under the Administrative Procedure Act (APA),
codified at 5 U.S.C. 553(d), a 30-day delayed effective date is
required, except for ``(1) a substantive rule which grants or
recognizes an exemption or relieves a restriction; (2) interpretative
rules and statements of policy; or (3) as otherwise provided by the
agency for good cause found and published with the rule.'' FinCEN finds
good cause under 5 U.S.C. 553(d)(3) to make this rule effective
immediately, because a 30-day delayed effective date is unnecessary.
The purpose of the 30-day delayed effective date is to ``give affected
parties a reasonable time to adjust their behavior before the final
rule takes effect.'' Omnipoint Corp. v. Fed. Commc'n Comm'n, 78 F.3d
620, 630 (D.C. Cir. 1996). The parties affected by this rule, however,
do not need time to adjust their behavior because the rule does not
impose any new obligations on them. On the contrary, this rule gives
affected parties additional time to adjust their behavior to the
requirements of the IA AML Rule. For the same reasons, 5 U.S.C.
553(d)(1) also applies.
Similarly, pursuant to the Congressional Review Act (CRA), OIRA has
designated this rule a ``major rule,'' for purposes of Subtitle E of
the Small Business Regulatory Enforcement and Fairness Act of 1996
(also known as the Congressional Review Act or CRA).\40\ Under section
801 of the CRA, a major rule generally may take effect no earlier than
60 days after the rule is published in the Federal Register.\41\
Notwithstanding this requirement, section 808(2) of the CRA allows
agencies to dispense with the requirements of section 801 when the
agency for good cause finds that such procedure would be impracticable,
unnecessary, or contrary to the public interest. If the agency finds
such good cause, the rule shall take effect at such time as the agency
promulgating the rule determines.\42\ Pursuant to section 808(2) and
for the reasons discussed above, FinCEN for good cause finds that
delaying the effective date of this rule is unnecessary and that this
rule should be effective upon publication in the Federal Register.
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\40\ See 5 U.S.C. 804(2).
\41\ 5 U.S.C. 801(a)(3).
\42\ 5 U.S.C. 808(2).
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List of Subjects

31 CFR Part 1010

Administrative practice and procedure, Anti-money laundering,
Banks, Money laundering, Reporting and recordkeeping requirements,
Suspicious transactions, Terrorist financing.

31 CFR Part 1032

Administrative practice and procedure, Anti-money laundering,
Banks, Banking, Brokers, Brokerage, Investment advisers, Money
laundering, Mutual funds, Reporting and recordkeeping requirements,
Securities, Small business, Suspicious transactions, Terrorist
financing.

Authority and Issuance

For the reasons stated in the preamble, FinCEN delays the effective
date of the rule published September 4, 2024, at 89 FR 72156, until
January 1, 2028, and amends 31 CFR part 1032 as follows:

PART 1032--RULES FOR INVESTMENT ADVISERS

0
1. The authority citation continues to read as follows:

Authority: 12 U.S.C. 1829b and 1951-1959; 31 U.S.C. 5311-5314
and 5316-5336; title III, sec. 314, Pub. L. 107-56, 115 Stat. 307.

0
2. Revise Sec. 1032.210(c) to read as follows:

[[Page 41]]

Sec. 1032.210 Anti-money laundering/countering the financing of
terrorism programs for investment advisers.

* * * * *
(c) Effective date. An investment adviser must develop and
implement an AML/CFT program that complies with the requirements of
this section on or before January 1, 2028.

Andrea M. Gacki,
Director, Financial Crimes Enforcement Network.
[FR Doc. 2025-24184 Filed 12-31-25; 8:45 am]
BILLING CODE 4810-02-P

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Delaying the Effective Date of the Anti-Money Laundering/Countering the Financing of Terrorism Program and Suspicious Activity Report Filing Requirements for Registered Investment Advisers and Exempt Reporting Advisers

Federal Register Citation

Suggested Web Citation