Treasury and FinCEN Announce Delay of IA–AML Rule Implementation to January 1, 2028

By James P. Melendres and Jason Spitalnick

On July 21, 2025, the U.S. Department of the Treasury’s Financial Crimes Enforcement Network (FinCEN) announced its intention to postpone the effective date of the Anti‑Money Laundering/Countering the Financing of Terrorism Program and Suspicious Activity Report Filing Requirements for Registered Investment Advisers and Exempt Reporting Advisers — commonly referred to as the IA‑AML Rule — from January 1,  2026, to January 1,  2028.

Substance of the IA‑AML Rule

Originally finalized in 2024, the IA‑AML Rule establishes a comprehensive AML/CFT compliance framework tailored to investment advisers. Key requirements include maintaining a risk‑based AML program, designating a compliance officer, performing periodic independent testing, conducting client risk assessments, verifying beneficial ownership, and filing Suspicious Activity Reports (SARs). It also parallels Bank Secrecy Act obligations, expanding AML regimes into advisory services — a sector previously outside FinCEN’s direct programmatic scope.

Reasons for the Delay

FinCEN emphasized that the delay seeks to ensure the rule’s design appropriately balances compliance costs with the imperative of combating illicit finance. Recognizing the diversity of business models and risk profiles across the investment adviser sector, FinCEN aims to revisit and refine the rule through further analysis and stakeholder engagement. Additionally, the agency stressed the importance of easing regulatory uncertainty and reducing the burden on advisers during this preparatory period.

Regulatory and Practical Implications

For investment advisers, this two‑year extension provides critical breathing room to assess and strengthen internal infrastructure before the IA‑AML benchmarks become mandatory. Firms can proactively leverage this time to finalize policies, develop SAR-monitoring capabilities, implement CIP systems, and evaluate IT platforms. However, advisers should treat this as a strategic window — not a reason to delay readiness.

On the legislative and rulemaking front, compliance teams should remain vigilant. FinCEN’s stated intent to reopen the IA‑AML Rule means that its scope and provisions may evolve, potentially tightening or relaxing current obligations. The forthcoming joint SEC-FinCEN CIP rulemaking also raises the prospect of new identity verification requirements for advisory relationships, with implications for Know-Your-Customer (KYC) processes.

Collaborative Oversight and Compliance Strategy

As the IA‑AML Rule is revisited, investment advisers should prepare for an iterative regulatory regime — one that may pivot based on industry feedback, cost-benefit analyses, inter-agency coordination, and the priorities of the governing administration. Customized risk assessments — rather than one-size-fits-all programs — will likely become better aligned with reshaped rule provisions. Firms should maintain dialogue with counsel, trade associations, and regulators to remain abreast of potential substantive changes.