New York Updates Finance Rule Per ACC Recommendations

Posted: Jul 28, 2016

WASHINGTON (July 28, 2016) – The Association of Corporate Counsel (ACC), a global legal association representing more than 40,000 in-house counsel in 85 countries, praises the New York State Department of Financial Services’ newly-adopted rules addressing prevention of money laundering. The new rules take into consideration an ACC recommendation to substantially rework portions of the rule addressing compliance officer criminal liability. 

ACC, its Compliance & Ethics Committee, its Financial Services Committee, the three New York-based ACC chapters, and 74 compliance officers and general counsel submitted a comment letter on the addition of Part 504 to Title 3 New York Codes, Rules and Regulations in spring 2016. The letter addressed the chief compliance officer certification requirement, and ACC urged the Department of Financial Services to reconsider the provision. 

The original rule required that chief compliance officers certify their companies’ transaction monitoring and watch-list filtering systems meet state requirements. However, the rules also stated that an incorrect or inaccurate certification would result in criminal liability for the compliance officer superficially, setting a dangerous precedent. 

In its final rule, the Department of Financial Services addresses ACC concerns, removing explicit references to criminal liability. Additionally, the board of directors, rather than the chief compliance officer, may sign the required certification. The updated rule takes into consideration that chief compliance officers may not have the authority necessary to implement requirements of the New York State Department of Financial Services proposal.

With New York a vanguard for other states on this issue, ACC welcomes the updated regulation.  

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