Financial Regulation

Reporting Requirement Under the Bank Secrecy Act, financial institutions are legally obligated to file SARs when they detect suspicious activity that may indicate criminal behavior (https://www.occ.treas.gov/topics/supervision-and-examination/bank-operations/financial-crime/suspicious-activity-reports/index-suspicious-activity-reports.html). These activities include money laundering, tax evasion, and fraud. Key Facts Reporting Requirement: Financial institutions are required by law to file a SAR if…

What Happens if a Short Sale Doesn’t Sell? A short sale, in which a mortgage lender agrees to accept a payoff that is less than the outstanding balance, can be a complex and time-consuming process. If a short sale does not sell, the homeowner may face several potential consequences. Extended…

Federal Financial Institutions Examination Council (FFIEC) Compliance: An Overview The Federal Financial Institutions Examination Council (FFIEC) is a crucial interagency body within the U.S. government, comprising several financial regulatory agencies. Established in 1979, its primary mission is to foster consistent and uniform standards for financial institutions across the nation. The…

A Financial Intelligence Unit (FIU) is a central, national agency responsible for receiving and analyzing disclosures of financial information concerning suspected proceeds of crime and potential money laundering activities (UNODC, 2011). FIUs play a crucial role in detecting and combating financial crimes, including money laundering, terrorism financing, and other illicit…

Purpose of the Securities Act The Securities Act of 1933 was enacted in response to the stock market crash of 1929 and the ensuing Great Depression. Its primary goal is to ensure that investors have access to complete and accurate information before investing in securities. The act aims to provide…

Suspicious Activity Reports (SARs) are essential tools in the fight against financial crime, facilitating the detection and prevention of money laundering, fraud, and other illegal activities. This article explores the triggers that necessitate the filing of SARs, the importance of reporting suspicious activities, and the regulatory framework governing SARs. Key…

SEC Rule 204: Enhancing Delivery Requirements for Equity Securities Regulation SHO (Short Sale Regulation) aims to prevent abusive short-selling practices and promote market stability. Rule 204 of Regulation SHO plays a crucial role in ensuring the timely delivery of securities in equity transactions. This article explores the key provisions and…

Purpose Form S-3 is a registration statement filed with the Securities and Exchange Commission (SEC) by reporting company issuers to issue shelf offerings (Law.cornell.edu, n.d.). Shelf offerings allow securities to be registered for an offering to be made on a continuous or delayed basis in the future (Securitieslawyer101.com, 2020). Key…

Customer Identification Program (CIP) Implementation The Customer Identification Program (CIP) was implemented on June 9, 2003, as a provision of the USA Patriot Act (2001) to combat terrorism and aid in anti-money laundering efforts (Modern Treasury; Wikipedia). The Department of the Treasury, through the Financial Crimes Enforcement Network (FinCEN), along…

Bank Secrecy Act Violations: Penalties and Consequences The Bank Secrecy Act (BSA) is a crucial federal law that aims to combat money laundering and other financial crimes. Violations of the BSA can result in severe penalties, both criminal and civil. Criminal Penalties Individuals, including bank employees, who willfully violate the…

The European Commission, the executive branch of the European Union, is composed of the College of Commissioners, which consists of 27 European Commissioners, one from each member state of the European Union (EU) [1]. Each Commissioner is responsible for one or several policy areas [1]. Key Facts Composition: The College…

Gather Relevant Information To file a SAR, it is essential to gather all relevant information about the suspicious activity. This includes: Key Facts Gather relevant information: Collect all the necessary details about the suspicious activity, including dates, amounts, individuals involved, and any supporting documentation. Determine if the activity meets reporting…

A Rule 415 offering, governed by the Securities and Exchange Commission (SEC) under Rule 415 of the Securities Act of 1933 (17 CFR § 230.415), is a registration statement filed by an issuer to offer securities for purchase in subsequent transactions (Law Insider, n.d.). Key Facts Definition: A Rule 415…

The FCA’s Authority to Prosecute The Financial Conduct Authority (FCA) possesses the authority to prosecute a range of criminal offenses in England, Wales, and Northern Ireland under sections 401 and 402 of the Act (FCA Handbook, 2023). The FCA’s general policy is to pursue criminal prosecution when it is appropriate…

Purpose of Suspicious Activity Reports Suspicious Activity Reports (SARs) serve as a crucial tool for financial institutions to report suspected cases of money laundering or fraud to the Financial Crimes Enforcement Network (FinCEN). These reports enable authorities to monitor unusual activities within the financial industry that may indicate illegal or…

The risk-based capital ratio (RBC ratio) is a regulatory requirement that establishes the minimum amount of capital a financial institution must hold in proportion to its risk exposure (Investopedia, 2020). This ratio aims to ensure that financial institutions have sufficient capital to withstand potential losses arising from the risks they…

Understanding the Safeguards Rule: A Comprehensive Guide Purpose of the Safeguards Rule The Safeguards Rule (16 CFR Part 314) is a federal regulation issued by the Federal Trade Commission (FTC) to protect the security and confidentiality of customer information held by financial institutions. It was originally enacted in 2003 and…

How to Get an Offer Accepted on a Short Sale Short sales, where homeowners sell their properties for less than the amount owed on their mortgages, can be an attractive option for buyers seeking bargains. However, securing approval for a short sale offer requires careful planning and adherence to specific…

Appointment of the Public Company Accounting Oversight Board (PCAOB) Members The Public Company Accounting Oversight Board (PCAOB) is a non-profit corporation created by the Sarbanes-Oxley Act of 2002 to oversee the audits of public companies and SEC-registered brokers and dealers [1]. The PCAOB’s primary duties include registering public accounting firms,…

Bank Secrecy Act (BSA) in Finance Introduction The Bank Secrecy Act (BSA) is a comprehensive set of laws and regulations implemented in the United States to combat money laundering and the financing of terrorism (OCC, n.d.). This act plays a critical role in safeguarding the financial system and ensuring the…