Institute Comments on NASD's Proposed Anti-Money Laundering Program Standards

Washington, DC, March 18, 2002 - The Institute has filed a comment letter with the Securities and Exchange Commission on proposed NASD Rule 3011, which would prescribe minimum standards for anti-money laundering compliance programs established by NASD members under the USA PATRIOT Act.

The letter recommends that the rule provide an exemption for broker-dealers who underwrite securities issued by registered investment companies that have established an anti-money laundering program meeting the requirements of Section 352 of the Act. The proposed exemption would apply only to the broker-dealer's fund underwriting activities.

The letter explains that the proposed exemption would avoid both unnecessary regulatory duplication and the creation of an illogical, bifurcated compliance examination regime-without creating any gaps in anti-money laundering compliance. It also points out that the proposal is consistent with congressional intent to allow appropriate tailoring of anti-money laundering compliance programs to fit different business models.