Reported by Dylan Tokar

U.S. regulators took another step on Monday toward bolstering anti-money-laundering safeguards with a proposal to require that certain investment advisers verify identities of their customers.

The proposal, which would extend identification requirements that already exist for broker-dealers and mutual funds, was issued jointly by the U.S. Securities and Exchange Commission and the U.S. Treasury Department’s Financial Crimes Enforcement Network.

The move is part of a broad push by the U.S. to patch up regulations designed to counter illicit finance. Along with investment advisers, FinCEN has also targeted vulnerabilities in the U.S. real-estate market and corporate entities that could be used to hide sources of dirty money.

The proposed rule complements a separate rule-making FinCEN initiated in February to extend to investment advisers regulations requiring financial institutions to detect and report suspicious transactions. Both regulations will apply to investment advisers registered with or required to report to the SEC. State-registered advisers won’t be covered by the new rules, according to officials.

Under the latest rule, covered investment advisers must take steps to identify and verify identities of customers and to maintain records associated with their efforts.

Read full report: https://www.wsj.com/articles/investment-advisers-face-customer-vetting-requirements-in-anti-money-laundering-push-9f56c51c