New York’s AML regulations set to be tougher than federal requirements

New York’s financial watchdog is seeking to ratchet up regulatory demands on the US state’s financial services industry.

Known as one of the US’ toughest regulators, Superintendent of Financial Services for New York State, Benjamin Lawsky, wants to see tough new anti-money laundering (AML) and cybersecurity procedures, beyond those called for by federal regulators.

Radical proposals
In remarks entitled Financial Federalism: The Catalytic Role of State Regulators in a Post-Financial Crisis World, Lawsky argues that federal regulations on Wall Street are insufficient and called for more monitoring.

The superintendent proposed that the state government’s experiment with new regulatory measures to combat financial fraud should include random audits of transaction monitoring and filtering systems to identify potential money laundering transactions for further review by compliance professionals.

Compliance auditors
Under Lawsky’s proposals these AML control systems would automatically flag up transactions with characteristics commonly associated with criminal activity, including terrorism.

The financial services watchdog says that bank AML procedures could be inadequate, defective or poorly managed, hence the need for independent compliance auditors.

Broad reach
Lawsky’s New York State Department of Financial Services (DFS) supervises all of the state’s chartered banks, most US-based branches and agencies of foreign financial institutions and all insurance companies in the state.

It also regulates all of New York State’s mortgage brokers, mortgage bankers, cheque cashers, money transmitters, budget planners, and other providers of financial services.

The DFS supervises more than 3,800 financial institutions with assets of more than US$7 trillion.

Categories: Trade Based Financial crimes News

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