FinCEN AML Rule for Investment Advisers: Scope and 2028 Status
The rule that brings SEC-registered and exempt reporting advisers under the Bank Secrecy Act has been adopted, delayed, and is under review with revisions planned. This guide sets out what the rule says, who it covers, where it stands, and what private fund managers should do in the meantime.
For private fund managers in the US this rule is a major change to their AML duties. Until it takes effect, most advisers have no direct Bank Secrecy Act program obligation. In practice, many already run investor KYC because banks, fund administrators, placement agents and institutional investors ask for it, and because US sanctions law applies to them regardless.
This guide reflects the position on 27 October 2026. The rule is under review, so check FinCEN and the Federal Register for later changes. It is a summary, not legal advice.
Where the Rule Stands in 2026
The final rule was published on 4 September 2024 and added a new Part 1032 to FinCEN's regulations. In July 2025 Treasury said it would postpone the rule and revisit its scope. FinCEN first granted exemptive relief and then, by a final rule published on 2 January 2026, moved the effective date from 1 January 2026 to 1 January 2028. That rule changed only the date; the substance of the 2024 rule is unchanged for now.
| Date | What happened |
|---|---|
| 15 Feb 2024 | FinCEN proposes AML/CFT program and SAR rules for investment advisers |
| 21 May 2024 | FinCEN and the SEC jointly propose a separate customer identification program (CIP) rule for advisers (89 FR 44571) |
| 4 Sep 2024 | Final IA AML rule published (89 FR 72156), with a compliance date of 1 January 2026 |
| 21 Jul 2025 | Treasury announces it intends to postpone the rule to 2028 and revisit its scope |
| 5 Aug 2025 | FinCEN exemptive relief order: covered advisers exempt from the rule until 1 January 2028 |
| 2 Jan 2026 | Final rule moving the effective date to 1 January 2028 published (91 FR 36) |
| 14 Aug 2026 | Treasury regulatory agenda records the plan to revise the IA AML rule (no target date) and lists a reissued joint CIP proposal with the SEC, targeted for September 2026 |
Treasury's regulatory agenda of 14 August 2026 still records FinCEN's intention to propose revisions to the adviser rule so that it is tailored to the sector's different business models and risk profiles, but gives that revision no separate rulemaking entry or target date. The only dated item is a reissued joint customer identification proposal with the SEC, replacing the May 2024 version, targeted for September 2026. As of 27 October 2026 neither proposal had been published in the Federal Register, and nothing in Part 1032 applies before 1 January 2028.
Which Advisers Are Covered
The rule adds "investment adviser" to the Bank Secrecy Act definition of financial institution, with exclusions that narrowed the scope from the original proposal.
| Adviser type | In scope? |
|---|---|
| SEC-registered investment adviser (RIA) | Yes, unless excluded below |
| Exempt reporting adviser (ERA): adviser solely to private funds with less than US$150 million in US AUM, or adviser solely to venture capital funds | Yes |
| RIA registered with the SEC solely as a mid-sized adviser, multi-state adviser or pension consultant | No |
| RIA not required to report any AUM on Form ADV | No |
| State-registered adviser, foreign private adviser, family office | No |
| Adviser with its principal office outside the US | Only for advisory activity in the US (including through US personnel), or for US persons, or for a foreign-located private fund with a US investor |
The SEC registration threshold is generally US$110 million in assets under management. For a private fund manager the practical test is usually simple: if you file Form ADV as an RIA or as an ERA, assume you are in scope unless one of the exclusions clearly applies.
What the Rule Requires
| Obligation | What the 2024 rule requires |
|---|---|
| AML/CFT program | Risk-based and reasonably designed, approved in writing by the board, sole proprietor, general partner, trustee or equivalent |
| Program elements | Internal policies, procedures and controls; independent testing; a designated person or persons; ongoing training; ongoing customer due diligence |
| Suspicious activity reports | File SARs with FinCEN for suspicious transactions involving or aggregating at least US$5,000 |
| Currency and funds transfer records | No exemption from Currency Transaction Reports or the Recordkeeping and Travel Rules |
| Information sharing | Section 314(a) requests from FinCEN apply; voluntary 314(b) sharing with other financial institutions is available |
| Examinations | Delegated by FinCEN to the SEC |
The rule lets an adviser exclude from its program any mutual fund it advises, bank- and trust company-sponsored collective investment funds, and any other adviser it advises that is itself subject to the rule. These already have their own Bank Secrecy Act duties, so the exclusion avoids duplication.
The fifth program element, ongoing customer due diligence, means understanding the nature and purpose of each customer relationship to build a risk profile, and monitoring on a risk basis to report suspicious transactions and keep customer information up to date. For a private fund adviser the "customer" analysis usually starts with the fund and extends to how the adviser understands the fund's investors.
What the Rule Does Not Include
- A customer identification program. Identity verification rules for advisers sit in a separate joint SEC and FinCEN proposal from May 2024, which FinCEN now plans to reissue. Until a final CIP rule exists, the 2024 rule does not prescribe how to identify and verify investors.
- The beneficial ownership requirement. The 2016 customer due diligence rule that requires banks, broker-dealers, mutual funds and futures commission merchants to identify the beneficial owners of legal entity customers was not extended to advisers. FinCEN said it may add a beneficial ownership requirement in a later rulemaking, not before a CIP rule is final and the CDD rule is revised. Until then, advisers decide on a risk basis whether to collect beneficial ownership information.
- The AML Act program amendments. The 2024 rule did not include the broader program changes FinCEN proposed in July 2024. FinCEN withdrew that proposal and issued a new program proposal in April 2026, which does not itself amend the adviser rule.
Delegating to Fund Administrators
Many private fund managers rely on an administrator to collect subscription documents and run investor KYC. The preamble to FinCEN's final rule confirms that an adviser may delegate program functions to service providers, including administrators located outside the US. Delegation must be under a contractual agreement with risk-based oversight, and the adviser stays responsible for the program. It must also be able to give FinCEN and the SEC access to the relevant information and records.
In practice that means knowing what your administrator checks, how often, which screening lists it uses, how it escalates alerts, and how quickly you can get the file for any investor. See our guide to fund subscription documents for where these checks sit in the onboarding pack.
What Fund Managers Should Do Before 2028
Confirm your status
Check whether you are an RIA, an ERA or excluded, and whether you are foreign-located. Record the analysis.
Map your investor KYC
List who collects identity, beneficial ownership, sanctions and PEP information for each fund today, and where the records are held.
Keep sanctions screening current
US sanctions apply to US persons now, whatever happens to the AML rule. Screen investors and their beneficial owners at onboarding and when lists change.
Draft the program, do not finalise it
Prepare policies for the five program elements and a SAR escalation path, ready to adjust when FinCEN publishes its revised rule.
Review delegation agreements
Make sure administrator contracts cover AML tasks, oversight, record access and regulator requests.
Plan independent testing and training
Decide who will test the program and who needs training, and budget for both in 2027.
For the wider US framework, see our FinCEN regulatory guide and when to file a SAR.
How One Constellation Supports Advisers
One Constellation gives fund managers and administrators one workflow for investor KYC: an onboarding portal, identity verification, KYB and beneficial-ownership tracing, sanctions, PEP and adverse-media screening, risk assessment, and case management with SAR workflows. Records sit in one place, which helps when a regulator or auditor asks for an investor file. See investor onboarding and AML for investment managers.
Frequently Asked Questions
When does the FinCEN investment adviser AML rule take effect?
On 1 January 2028. The rule was adopted in 2024 with a 1 January 2026 compliance date, but a final rule published on 2 January 2026 moved the effective date to 1 January 2028. FinCEN has said it intends to propose revisions; none had been published as of 27 October 2026.
Does the rule apply to exempt reporting advisers?
Yes. Exempt reporting advisers, including private fund advisers below the SEC registration threshold and venture capital fund advisers, are covered, as are most SEC-registered advisers. State-registered advisers, foreign private advisers and family offices are not.
Do investment advisers have to file SARs now?
Not under the adviser rule, which does not apply until 1 January 2028. From that date covered advisers must file SARs for suspicious transactions involving or aggregating at least US$5,000, unless FinCEN changes the rule first.
Does the rule require a customer identification program?
No. CIP requirements for advisers are in a separate joint SEC and FinCEN proposal from May 2024, which FinCEN plans to reissue. Until a final CIP rule is adopted there is no prescribed identity verification standard for advisers.
Can a fund administrator run the AML program for an adviser?
An adviser can delegate program functions to a service provider such as a fund administrator, under a contractual agreement and with risk-based oversight, but it remains responsible for the program and must be able to produce records for FinCEN and the SEC.
Sources
- FinCEN fact sheet: final rule for investment advisers (28 August 2024)
- Final rule, 89 FR 72156 (4 September 2024)
- Treasury announces postponement of the investment adviser rule (updated 31 December 2025)
- FinCEN final rule postponing the effective date to 2028
- Treasury regulatory agenda, 91 FR 53050 (14 August 2026)
- FinCEN exemptive relief order (5 August 2025)
- Final rule delaying the effective date, 91 FR 36 (2 January 2026)
- FinCEN AML/CFT program proposal, 91 FR 18704 (10 April 2026)
- SEC press release on the proposed adviser CIP rule (May 2024)
This article is general information, not legal advice. Requirements change — check the current text with the regulator before relying on it.
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