August 2016

Q. Broker-dealers engage in transactions through omnibus accounts and sub-accounts established by financial intermediaries.

The staff of the Board of Governors of the Federal Reserve System, Federal Deposit Insurance Corporation, Financial Crimes Enforcement Network, National Credit Union Administration, Office of the Comptroller of the Currency, Office of Thrift Supervision, and the United States Department of the Treasury (“Agencies”) are issuing these frequently asked questions (“FAQs”) regarding the application of 31 C.F.R. § 103.121.

Banks, thrift institutions, bank holding companies and non-bank subsidiaries, credit unions, the U.S. branches and agencies of foreign banks, and certain other financial institutions are required to file Suspicious Activity Reports (SARs) pursuant to regulations issued by the five federal financial institutions supervisory agencies and the U.S. Department of the Treasury’s Financial Crimes Enforcement Network (FinCEN).

The staff of the Commodity Futures Trading Commission (“CFTC”), Financial Crimes Enforcement Network (“FinCEN”), and the United States Department of the Treasury (“Treasury”) are issuing these questions and answers (“Q&As”) regarding the application of 31 C.F.R. § 103.123.

In light of recent actions involving Riggs Bank N.A., the Office of the Comptroller of the Currency, the Board of Governors of the Federal Reserve System, the Federal Deposit Insurance Corporation, the Office of Thrift Supervision and the National Credit Union Administration (“the Agencies”) and the Financial Crimes Enforcement Network have received inquiries as to whether financial institutions should do business with embassies and establish account services for foreign governments, foreign embassies and foreign political figures.

It is the longstanding policy of the United States Department of the Treasury that persons residing or working in the United States should have access to U.S. banking services. This policy certainly encompasses the embassies and interests sections of foreign governments and their staffs.

FinCEN has updated the Magnetic Media Filing Specifications "ZIP Code Validation List" for the Mag Specs for the four SAR forms, the CTR and CTR-C. The updated files are available on the FinCEN website at www.fincen.gov/resources/filing-information. Click on the specific form needed. The changes are effective February 1, 2005.

The Financial Crimes Enforcement Network has an obligation to ensure that data collected under the Bank Secrecy Act are properly collected, securely maintained and appropriately disseminated.

This FinCEN interpretive guidance clarifies that reports filed with the Department of the Treasury’s Office of Foreign Assets Control (“OFAC”) of blocked transactions with Specially Designated Global Terrorists, Specially Designated Terrorists, Foreign Terrorist Organizations, Specially Designated Narcotics Trafficker Kingpins, and Specially Designated Narcotics Traffickers will be deemed by FinCEN to fulfill the requirement to file suspicious activity reports on such transactions for purposes of FinCEN’s suspicious activity reporting rules.

The Financial Crimes Enforcement Network (“FinCEN”), together with the Board of Governors of the Federal Reserve System, the Office of the Comptroller of the Currency, the Federal Deposit Insurance Corporation, the Office of Thrift Supervision, and the National Credit Union Administration (collectively, the “Federal Banking Agencies”) are jointly issuing this Statement to address our expectations regarding banking institutions’ obligations under the Bank Secrecy Act for money services businesses, such as check cashers and money transmitters.¹ Money services businesses are losing