Washington, D.C. (April 17, 2024) The American Institute of CPAs (AICPA) submitted a letter to the Financial Crimes Enforcement Network (FinCEN) this week providing feedback on a proposed ruling and addressing concerns regarding the implications of the proposed regulations on Registered Investment Advisers (RIAs).
The AICPA’s letter references FINCEN-2024-0006 andRIN 1506-AB58, Anti-Money Laundering/Countering the Financing of Terrorism Program and Suspicious Activity Report Filing Requirements for Registered Investment Advisers and Exempt Reporting Advisers asproposed by FinCEN.
The proposed regulations rely on Assets Under Management (AUM) as the sole determinant for regulatory thresholds. The AICPA believes this overlooks the practical considerations of the size and capacity of RIAs, particularly smaller firms, and suggests that regulatory thresholds be evaluated based on a combination of factors, including the number of employees and average AUM per client.
The recommendations also cite the introduction of additional regulatory requirements imposing a significant administrative burden on small RIAs, which can be considered a duplication of efforts already performed by the RIA’s custodian.
The cumulative impact of the regulatory requirements on RIAs could cause challenges in maintaining compliance, potentially deterring new entrants and limiting competition in the industry. The AICPA has asked FinCEN to reassess the proposed regulations to ensure that there is an appropriate balance between regulatory objectives and practical realities faced by RIAs.
“Any regulatory framework should aim to support the ability of smaller firms to thrive and contribute positively to the financial services landscape,” says Dan Snyder, CPA/PFS, director of Personal Financial Planning at AICPA. “The AICPA’s recommendations will help small CPA firms that are also Registered Investment Advisors (RIA) ultimately increasing access to personalized financial services and encouraging innovation and diversity within the industry.”
About the American Institute of CPAs
The American Institute of CPAs® (AICPA®) is the world’s largest member association representing the CPA profession, with more than 415,000 members in the United States and worldwide, and a history of serving the public interest since 1887. AICPA members represent many areas of practice, including business and industry, public practice, government, education and consulting. AICPA sets ethical standards for its members and U.S. auditing standards for private companies, not-for-profit organizations, and federal, state and local governments. It develops and grades the Uniform CPA Examination, offers specialized credentials, builds the pipeline of future talent and drives continuing education to advance the vitality, relevance and quality of the profession.
###
Contact: Kathleen Zinszer
919-402-4978
Kathleen.Zinszer@aicpa-cima.com