Compliance Risk Concepts
Client Login
compliance risk logo-2024

Monthly Regulatory Summary (January 2024)

Monthly Regulatory Summary (January 2024)

No Comments
February 29, 2024

As the regulatory landscape is constantly evolving, Compliance Risk Concepts (“CRC”) is issuing its monthly review and summary of various FINRA, SEC, NFA, and FinCEN publications to assist our clients in keeping abreast of notable regulatory developments and deadlines in an effort to strengthen their compliance and regulatory initiatives.


Regulatory Notices

Per Regulatory Notice 24-01, FINRA’s Renewal Program supports the collection and disbursement of fees related to the renewal of broker-dealer (BD) and investment adviser (IA) registrations, exempt reporting and notice filings with participating self-regulatory organizations (SRO) and jurisdictions. During this program, FINRA announces renewal fees BD and IA firms owe via Preliminary Statements issued in November. FINRA publishes Final Statements in January to confirm or reconcile the actual renewal fees BD and IA firms owe after Jan. 1, 2024.

FINRA is issuing this Notice to help firms review, reconcile and respond to their Final Statements in E-Bill as well as view the reports that are currently available in the Central Registration Depository (CRD) and Investment Adviser Registration Depository (IARD) systems for the annual registration renewal process.

The deadline to remit payment for any additional amounts owed and to report any discrepancies to FINRA is Jan. 26, 2024. It is critical that firms ensure they pay in full or report discrepancies by this deadline. More information about reporting discrepancies, as well as key dates, is provided below.

Firms should also refer to the following web pages for additional information and resources:

Questions concerning this Notice should be directed to the FINRA Support Center at (301) 869-6699.

Per Regulatory Notice 24-02, FINRA is issuing this Notice to announce the effective dates of two new supplementary materials under FINRA Rule 3110 (Supervision) as follows:

  • Rule 3110.19 (Residential Supervisory Location) becomes effective on June 1, 2024; and
  • Rule 3110.18 (Remote Inspections Pilot Program) becomes effective on July 1, 2024.

FINRA expects to publish additional guidance outlining in greater detail operational processes for compliance with the data and information requirements of Rules 3110.18 and 3110.19.

The rule text for Rules 3110.18 and 3110.19 is available in Attachment A. In addition, FINRA is announcing May 31, 2024, as the end date of the regulatory relief set forth in Regulatory Notice 20-08 (March 2020) (Notice 20-08 Relief) with respect to the obligation of firms to maintain current information for employment addresses and branch offices on specified uniform registration forms. In light of these changes, firms are encouraged to consult with FINRA’s Membership Application Program (MAP) Group as they consider the materiality of any potential increase in the number of offices or locations.


Final Rules

Per Release No. 33-11265, the SEC is adopting rules intended to enhance investor protections in initial public offerings by special purpose acquisition companies (commonly known as SPACs) and in subsequent business combination transactions between SPACs and private operating companies (commonly known as de-SPAC transactions). Specifically, the SEC is adopting disclosure requirements with respect to, among other things, compensation paid to sponsors, conflicts of interest, dilution, and the determination, if any, of the board of directors (or similar governing body) of a SPAC regarding whether a de-SPAC transaction is advisable and in the best interests of the SPAC and its shareholders. The SEC is adopting rules that require a minimum dissemination period for the distribution of security holder communication materials in connection with de-SPAC transactions. The SEC is adopting rules that require the re-determination of smaller reporting company (“SRC”) status in connection with de-SPAC transactions. The SEC is also adopting rules that address the scope of the safe harbor for forward-looking statements under the Private Securities Litigation Reform Act of 1995. Further, the SEC is adopting a rule that would deem any business combination transaction involving a reporting shell company, including a SPAC, to be a sale of securities to the reporting shell company’s shareholders and are adopting amendments to a number of financial statement requirements applicable to transactions involving shell companies. In addition, the SEC is providing guidance on the status of potential underwriters in de-SPAC transactions and adopting updates to the SEC’s guidance regarding the use of projections in SEC filings as well as requiring additional disclosure regarding projections when used in connection with business combination transactions involving SPACs. Finally, the SEC is providing guidance for SPACs to consider when analyzing their status under the Investment Company Act of 1940.

Proposed Rules

There were no proposed rules in January.

Interim Final Rules

There were no interim final rules in January.

Interpretive Releases

There were no interpretive releases in January.

Policy Statements

There were no policy statements in January.


Notices to Members

Notice I-24-01

January 4, 2024

Notice of Annual Meeting of NFA Members and Board and Nominating Committee election

Notice of Annual Meeting

NFA will hold its Annual Meeting of Members on Tuesday, February 6, 2024, at 12:00 p.m. CT, via videoconferencing. The agenda of the meeting is:

  1. Opening remarks.
  2. Members' questions regarding NFA-related topics.
  3. Any other business that may properly come before the Annual Meeting (or any adjournment or postponement thereof).

To register for the Annual Meeting of Members, please email your name, NFA ID and contact email to Registration is due by Wednesday, January 31, 2024. NFA will then provide you with an invitation to the Annual Meeting.

Board and Nominating Committee Election

On October 23, 2023, NFA notified all Members of the candidates that the 2023 Nominating Committee nominated for election to NFA's Board of Directors and 2024 Nominating Committee and advised Members of the procedures by which additional candidates could petition to be nominated for election. No Members have petitioned for nomination of a candidate for election to the Board of Directors or Nominating Committee. Accordingly, NFA's Board of Directors, pursuant to Article VII, Section (3)(a) and NFA Bylaw 709 (effective February 15, 2024), will elect the nominees to the Board and Nominating Committee in February 2024.

Notice I-24-02

January 25, 2024

Member obligations under NFA Bylaw 1101 and Compliance Rule 2-36(d) with respect to CPOs/CTAs exempt from registration

The CFTC requires any person that claims an exemption from CPO registration under CFTC Regulation 4.13(a)(1), 4.13(a)(2), 4.13(a)(3), 4.13(a)(5), an exclusion from CPO registration under CFTC Regulation 4.5 or an exemption from CTA registration under 4.14(a)(8) (collectively, exemption) to annually affirm the applicable notice of exemption within 60 days of the calendar year end. Persons that fail to file the affirmation notice by February 29, 2024, will be deemed to have requested a withdrawal of the exemption and, therefore, may be required to be registered and NFA Members.

Since exempt CPOs/CTAs have until February 29, 2024, to complete the affirmation process, NFA recognizes that it may be difficult for a Member to conclusively determine prior to that date whether a previously exempt CPO/CTA continues to be eligible for a current exemption.

Therefore, Members who take reasonable steps to determine the registration and membership status of these previously exempt persons will not be in violation of NFA Bylaw 1101 or Compliance Rule 2-36(d) if, between January 1 and March 31, 2024, they transact customer business with a previously exempt person that fails to become registered and an NFA Member, file a notice affirming its exemption from CPO/CTA registration, or provide a written representation as to why the person is not required to register or file the notice affirming the exemption.

How to identify whether an exempt CPO/CTA has affirmed its exemption

Members should compare their list of exempt CPO/CTAs with which the Member transacts customer business to the information NFA makes available to assist Members in determining whether an exempt CPO/CTA has affirmed its exemption(s). Members can review exemption information in two ways. Members can view individual persons or entities by navigating to NFA's BASIC System, opening the person or entity's record, and, if applicable, clicking 'View All' in the Firm Exemptions box and/or the Pools & Pool Exemptions box. The Firm Exemptions page and/or the Pools & Pool Exemptions page will reflect an affirmation date if an exempt person or entity has properly filed a notice affirming an exemption, if applicable. Any exemption that was not affirmed in the previous year will no longer appear in BASIC as of March 1, 2024.

Alternatively, Members can access a spreadsheet that includes a list of all persons or entities that have exemptions on file with NFA that must be affirmed on an annual basis. This spreadsheet, which is updated nightly, can be found in the Member's Annual Questionnaire which can be accessed by logging into the system. The spreadsheet includes all persons or entities with an exemption(s) that requires an annual affirmation, as well as the most recent affirmation date, if applicable, and the affirmation due date. If the affirmation due date is February 29, 2024, the exemption has not yet been affirmed. Once the exemption has been affirmed, the affirmation due date will change to March 1, 2025. Any exemptions not affirmed after February 29, 2024, will be withdrawn.

Expectations for Members transacting customer business with an exempt CPO/CTA that has not affirmed its exemption

NFA expects any Member transacting customer business with a person that previously claimed an exemption from CPO/CTA registration under the regulations listed above, and that has not filed a notice in NFA's Exemption System affirming the exemption, not filed a notice of exemption for another available exemption, or not properly registered and become an NFA Member by December 31, 2023, to promptly contact the person to determine whether the person intends to file a notice affirming the exemption.

If the Member learns that the person does not intend to file a notice affirming the exemption, or the person does not file a notice affirming the exemption by February 29, 2024, then the Member must promptly obtain a written representation as to why the person is not required to register or file a notice of exemption and evaluate whether the representation appears adequate. If the Member determines that this written representation is inadequate and the person is required to be registered, then the Member must put a plan in place (e.g., liquidation-only trades) to cease transacting customer business with the person or risk violating NFA Bylaw 1101 or Compliance Rule 2-36(d). Any Member that acts in accordance with the information provided in this Notice will not be charged with violating NFA Bylaw 1101 or Compliance Rule 2-36(d). Members should be aware, however, that this Notice does not relieve their regulatory obligations pursuant to the Commodity Exchange Act and the CFTC's Regulations.

NFA News Releases

There were no NFA News Releases in January.


FinCEN News Releases

U.S. Beneficial Ownership Information Registry Now Accepting Reports

January 01, 2024

Existing Companies Have One Year to File; New Companies Must File Within 90 Days of Creation or Registration

WASHINGTON -- Today, the U.S. Department of the Treasury’s Financial Crimes Enforcement Network (FinCEN) began accepting beneficial ownership information reports. The bipartisan Corporate Transparency Act, enacted in 2021 to curb illicit finance, requires many companies doing business in the United States to report information about the individuals who ultimately own or control them.

Filing is simple, secure, and free of charge. Companies that are required to comply (“reporting companies”) must file their initial reports by the following deadlines:

  • Existing companies: Reporting companies created or registered to do business in the United States before January 1, 2024 must file by January 1, 2025.
  • Newly created or registered companies: Reporting companies created or registered to do business in the United States in 2024 have 90 calendar days to file after receiving actual or public notice that their company’s creation or registration is effective.

Beneficial ownership information reporting is not an annual requirement. A report only needs to be submitted once, unless the filer needs to update or correct information. Generally, reporting companies must provide four pieces of information about each beneficial owner:

  • name;
  • date of birth;
  • address; and
  • the identifying number and issuer from either a non-expired U.S. driver’s license, a non-expired U.S. passport, or a non-expired identification document issued by a State (including a U.S. territory or possession), local government, or Indian tribe. If none of those documents exist, a non-expired foreign passport can be used. An image of the document must also be submitted.

The company must also submit certain information about itself, such as its name(s) and address. In addition, reporting companies created on or after January 1, 2024, are required to submit information about the individuals who formed the company (“company applicants”).

FinCEN is committed to providing America’s small businesses with the resources and information they need to make filing as quick and easy as possible. FinCEN’s Small Entity Compliance Guide walks small businesses through the requirements in plain language. Filers can also view informational videos and webinars, find answers to frequently asked questions, connect to the contact center, and learn more about how to report at

FinCEN Issues Analysis of Identity-Related Suspicious Activity

January 09, 2024

Report examines suspicious activity tied to the exploitation of identity processes during account creation, account access, and transaction processing

WASHINGTON—Today, the Financial Crimes Enforcement Network (FinCEN) issued a Financial Trend Analysis (FTA) on information linked to identity-related suspicious activity in Bank Secrecy Act (BSA) reports filed in calendar year 2021. FinCEN’s analysis found that approximately 1.6 million reports (42% of the reports filed that year) related to identity—indicating $212 billion in suspicious activity.

“This report reveals the existence of significant identity-related exploitations through a large variety of schemes,” said FinCEN Director Andrea Gacki. “Robust customer identity processes are foundational to the security of the U.S. financial system, and critical to the effectiveness of financial institutions’ programs to combat money laundering and counter the financing of terrorism. Financial institutions are encouraged to work across their internal departments to address these schemes.”

The report, which is part of what FinCEN has previously referred to as its Identity Project, explores how bad actors exploit identity-related processes involved in processing transactions as well as opening and accessing accounts. FinCEN identified over 14 typologies commonly indicated in identity-related BSA reports. The most frequently reported were fraud, false records, identity theft, third-party money laundering, and circumvention of verification standards. These top five typologies accounted for 88% of identity-related BSA reports and 74% of the total identity-related suspicious activity amount reported during calendar year 2021.

Trends found in the BSA reporting include:

  • Although identity-related suspicious activity impacted all types of financial institutions, depository institutions filed the most identity-related BSA reports, around 54% of all identity-related filings.
  • While most financial institutions in the identity-related BSA dataset reported impersonation as their top identity exploitation, money services businesses most often reported circumvention of verification.
  • The report found that compromised credentials have a disproportionate financial impact as compared to other types of identity exploitation.

FinCEN’s FTAs highlight the value of information filed by financial institutions in accordance with the BSA. Additional reports on a variety of topics are located on FinCEN’s website.

FinCEN is committed to using its authorities to assist financial institutions with detecting, reporting, and preventing criminals from circumventing these processes to victimize customers. In line with the 2022 National Strategy for Combating Terrorist and Other Illicit Financing, Treasury and FinCEN recognizes that innovations in digital identity can strengthen anti-money laundering and countering the financing of terrorism compliance and help banks and other financial institutions more effectively and efficiently identify and report illicit financial activity.

To advance responsible innovation, FinCEN has engaged with the private and public sectors to assess opportunities and to explore the risks and challenges emerging technologies present to financial institutions—including through the Bank Secrecy Act Advisory Group, FinCEN Exchanges, and Innovation Hours. The bureau has partnered with the Federal Deposit Insurance Corporation in a digital identity-focused Tech Sprint, and with other regulators and law enforcement to support the U.S.-UK Privacy Enhancing Technologies Prize Challenges. FinCEN has also served as the Department of the Treasury’s point for the Federal Identity Forum and Expo or FedID conference, the U.S. government’s annual public-private identity conference. These efforts served as a forum for stakeholders to both embrace responsible innovation and leverage innovation to mitigate risks, as well as identify threats and opportunities to protect the American people and the financial sector from illicit finance.

FinCEN Finds Iraq-based Al-Huda Bank to be of Primary Money Laundering Concern and Proposes a Rule to Combat Terrorist Financing

January 29, 2024

WASHINGTON — Today, the U.S. Department of the Treasury’s Financial Crimes Enforcement Network (FinCEN) issued a finding and notice of proposed rulemaking (NPRM) that identifies Al-Huda Bank, an Iraqi bank that serves as a conduit for terrorist financing, as a foreign financial institution of primary money laundering concern. Along with its finding, FinCEN proposed imposing a special measure that would sever the bank from the U.S. financial system by prohibiting domestic financial institutions and agencies from opening or maintaining a correspondent account for or on behalf of Al-Huda Bank.

Bad actors like Al-Huda Bank and its foreign sponsors fuel violence that threatens the lives of U.S. and Iraqi citizens alike while diverting funds that could otherwise support legitimate business and the economic aspirations of the Iraqi people. Treasury remains committed to its longstanding shared work with the Government of Iraq to strengthen the Iraqi economy and protect both the U.S. and Iraqi financial systems from abuse.

“Iraq has made significant progress in rooting out illicit activity from its financial system, but unscrupulous actors continue to seek to take advantage of the Iraqi economy to raise and move money for illicit activity,” said Under Secretary of the Treasury for Terrorism and Financial Intelligence Brian E. Nelson. “By identifying Al-Huda Bank as a key money laundering channel for destabilizing terrorist activity by Iran, proposing a special measure that will sever its correspondent banking access, and imposing sanctions on their CEO, we can protect the Iraqi financial system and its legitimate businesses, as well as the international financial system, from abuse by Iran and other illicit actors.”

“Evidence available to FinCEN has demonstrated that Al-Huda Bank served as a significant conduit for the financing of foreign terrorist organizations (FTOs),” said FinCEN Director Andrea Gacki. “We will continue to leverage the full range of our authorities to target terrorist financing while simultaneously supporting the legitimate use of the international financial system.”

As described in the finding, for years, Al-Huda Bank has exploited its access to U.S. dollars to support designated FTOs, including Iran’s Islamic Revolutionary Guard Corps (IRGC) and IRGC-Quds Force (IRGC-QF), as well as Iran-aligned Iraqi militias Kata’ib Hizballah (KH) and Asa’ib Ahl al-Haq (AAH). Moreover, the chairman of Al-Huda Bank is complicit in Al-Huda Bank’s illicit financial activities including money laundering through front companies that conceal the true nature of and parties involved in illicit transactions, ultimately enabling the financing of terrorism.

Since its establishment, Al-Huda Bank has been controlled and operated by the IRGC and the IRGC-QF. After establishing the bank, the Al-Huda Bank chairman began money laundering operations on behalf of the IRGC-QF and KH. Additionally, Al-Huda Bank affords access to the U.S. financial system to actors known to use fraudulent documentation, fake deposits, identity documents of the deceased, fake companies, and counterfeit Iraq dinar, providing opportunities to obscure the identities of the transaction counterparties to correspondent banking relationship providers.

To protect U.S. banks from Al-Huda Bank’s illicit activity, FinCEN is taking this action pursuant to Section 311 of the USA PATRIOT Act (section 311). Section 311 actions alert the U.S. financial sector to foreign institutions, such as Al-Huda Bank, that are of primary money laundering concern and through the public rulemaking process, if necessary, prevent direct and indirect access to the U.S. financial system. FinCEN has proposed a rule that would impose special measure five, which would prohibit domestic financial institutions and agencies from opening or maintaining a correspondent account for or on behalf of Al-Huda Bank.

This finding and NPRM are issued today alongside complementary Treasury actions to disrupt funding for Iran-aligned terrorist groups. Treasury’s Office of Foreign Assets Control (OFAC) designated Hamad al-Moussawi, the owner and chairman of Al-Huda Bank, for having materially assisted, sponsored, or provided financial, material, or technological support for, or goods or services to or in support of, the IRGC-QF. Previously, on November 17, 2023, OFAC designated six key individuals affiliated with KH following the group’s attacks against United States personnel and partners in Iraq and Syria. On January 22, 2024, OFAC designated three additional key individuals affiliated with KH, a business used by KH to generate revenue and launder money, as well as an Iraqi airline that the IRGC-QF and its proxies in Iraq used to transport fighters, weapons, and money to Syria and Lebanon. Additionally, since the brutal attacks against Israel in October, OFAC has imposed five rounds of sanctions targeting Hamas-linked operatives and financial facilitators.


Section 311 grants the Secretary of the Treasury authority, upon finding that reasonable grounds exist for concluding that one or more financial institutions operating outside of the United States is of primary money laundering concern, to require domestic financial institutions and domestic financial agencies to take certain “special measures.” The five special measures set out in section 311 are safeguards that may be employed to defend the United States financial system from money laundering and terrorist financing risks. The Secretary may impose one or more of these special measures in order to protect the U.S. financial system from such threats. Through special measure one, the Secretary may require domestic financial institutions and domestic financial agencies to maintain records, file reports, or both, concerning the aggregate amount of transactions or individual transactions. Through special measures two through four, the Secretary may impose additional recordkeeping, information collection, and reporting requirements on covered domestic financial institutions and domestic financial agencies. Through special measure five, the Secretary may prohibit, or impose conditions on, the opening or maintaining in the United States of correspondent or payable-through accounts for or on behalf of a foreign banking institution, if such correspondent account or payable-through account involves the foreign financial institution found to be of primary money laundering concern. The authority of the Secretary to administer the Bank Secrecy Act, including, but not limited to, section 311, codified at 31 U.S.C. § 5318A, has been delegated to the Director of FinCEN.

The NPRM as submitted to the Federal Register is currently available here. Written comments on the NPRM may be submitted within 30 days of publication of the NPRM in the Federal Register.

FinCEN Assesses $100,000 Civil Money Penalty against Gyanendra Kumar Asre for Violations of the Bank Secrecy Act

January 31, 2024

WASHINGTON—Today, the United States Department of the Treasury’s Financial Crimes Enforcement Network (FinCEN) assessed a $100,000 civil money penalty on Gyanendra Kumar Asre (Asre) for willful violations of the Bank Secrecy Act (BSA) and its implementing regulations. FinCEN’s action also imposes a five-year ban on Asre’s participation in the conduct of the affairs of any financial institution subject to the BSA.

“Asre allowed millions of dollars in high-risk transactions to be processed without required anti-money laundering controls or reporting to FinCEN,” said FinCEN Director Andrea Gacki. “Today’s action serves as a reminder that FinCEN will not hesitate to take action against individuals when their conduct jeopardizes the integrity of our financial system.”

Asre admitted to willfully violating the BSA. Asre failed to register his money services business (MSB) with FinCEN and, in his capacity as the BSA Compliance Officer of a credit union, failed to maintain an effective AML program and failed to detect and report suspicious transactions. During Asre’s tenure as BSA Compliance Officer, the credit union’s risk profile drastically increased, including by providing services to Asre’s unregistered MSB. Despite these elevated risks, Asre failed to implement adequate AML controls. As a result, hundreds of millions of dollars in high-risk and suspicious funds—including substantial bulk cash deposits—moved through the credit union without proper monitoring or reporting to FinCEN.

FinCEN appreciates the close collaboration with its partners at the National Credit Union Administration (NCUA) on this matter and thanks the Department of Justice Money Laundering and Asset Recovery Section (MLARS) for its work on the parallel criminal matter. Today, Asre entered into a guilty plea with MLARS for criminally violating the BSA.

Hot Issue

FINRA has finally announced an end date to the pandemic reporting relief under Notice 20-08. Starting on June 1, 2024, firms must resume their continuing obligation to:

  • Maintain updated Form U4 information regarding the office of employment address for registered persons who relocated due to COVID-19; and
  • Submit or update branch office applications on Form BR for any office locations or space-sharing arrangements established as a result of COVID-19 that have not otherwise been registered or updated with FINRA through Form BR.

Now that a timeline has been established, CRC recommends that firms not wait until June to evaluate the potential increase in registered or unregistered offices because of the need to consider whether changes may trigger a “material change in business operations” under Rule 1017 and related guidance.

Our Perspective

The best approach to regulatory compliance is a proactive one. Staying ahead of the curve by taking note of statements and guidance released by regulators and using them as a barometer to assess the current regulatory climate can help ensure that a firm is prepared for a regulatory exam. Rather than scrambling to rectify issues or meet deadlines, a thorough, active compliance program that considers and incorporates regulatory developments is in a better position to satisfy regulators and preserve operations so they can best serve their clients.

For more information, please contact:

Mitch Avnet

p. (646) 346-2468

David Amster

p. (917) 568-6470


  • FINRA Notices
  • SEC Regulatory Actions
  • SEC Press Releases
  • NFA Notices
  • FinCEN News Releases



Stay updated with all latest updates,upcoming events & much more.

Subscribe NowSupport
Copyright Compliance Risk Concepts | All Rights Reserved © 2023 | Privacy Policy