Final Anti-Money Laundering Recommendations Released

Washington, DC, October 28, 2005 - A committee of the International Organization of Securities Commissions (IOSCO) recently published its final report on anti-money laundering responsibilities for collective investment schemes (CIS), such as mutual funds.

Background
The report was first published as a consultation document in February 2005. The recommendations made largely mirror U.S. anti-money laundering requirements, such as recommending that each mutual fund develop and implement a written program reasonably designed to prevent it from being used for money laundering and terrorist financing, verify the identities of its investors and beneficial owners.

IOSCO made two changes to the recommendations that will impact mutual funds in response to comments from the Institute. First, IOSCO addressed ICI's concerns that the preliminary report did not address the fact that customer information available to a CIS may be different than the customer information available to a bank or a securities firm. IOSCO addressed that concern by including "types of identifying information available" among the appropriate factors for a CIS to consider in establishing its customer identification and verification procedures. Second, IOSCO responded to ICI's request that it explicitly recognize the exception under the mutual fund customer identification program (CIP) rule for transactions through the National Securities Clearing Corporation's Fund/SERV system. IOSCO did so by adding a reference to Fund/SERV in the final report.

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