The NASD has launched a new Web-based tool to help brokers identify terrorists and avoid doing business with potential money launderers, the firm says.
Brokers must use this automated tool to determine that clients aren’t on the U.S. Treasury’s list of known and suspected terrorists.
The U.S. Patriot Act, which was signed into law by President Bush in the wake of the September 11 terrorist attacks, imposes anti-money laundering requirements on brokerage firms. The original compliance deadline was April 24, but that has been extended while the rules are clarified, the NASD says.
"It’s definitely worth having [the tool] in light of the terrorist attacks," says a Merrill Lynch broker. "Every broker has to be careful these days [when dealing with new clients]."
"Knowing your client is more important today than ever before," says a Morgan Stanley rep. "When you see what can happen, we have to make sure we’re not used to assist terrorism in any form."
A UBS PaineWebber broker says it’s "imperative" to have rules and regulations in place to prevent terrorists from money laundering. "But it’s scary being on the front line," the producer says. "If something goes wrong, it comes back to us."
The Treasury is in the process of publishing final regulations requiring broker/dealers to file suspicious activity reports, a component of the Patriot Act.
The NASD offers brokers and brokerage firms a training course on anti-money laundering. For more information, see www.nasd.com/aml/training.
