FinCEN postpones effective date of anti-money laundering rules for investment advisers

On July 21, 2025, the U.S. Department of the Treasury’s Financial Crimes Enforcement Network (FinCEN) announced that it would revisit the substance of a final rule that would establish anti-money laundering and countering the financing of terrorism (AML/CFT) compliance requirements on certain investment advisers (the Investment Adviser Rule).[1] FinCEN anticipates that it will postpone the effective date of the Investment Adviser Rule until January 1, 2028. The delay, according to FinCEN, would allow the agency to revisit the scope of the Investment Adviser Rule to ensure that it “appropriately balances costs and benefits.” The announcement also suggests that the agency may significantly reduce the scope of compliance obligations imposed on the investment adviser sector, in accordance with the administration’s broader deregulatory agenda. FinCEN also stated that it will work with the Securities and Exchange Commission (SEC) to revisit the joint proposed rule that would establish Customer Identification Program (CIP) rule requirements for investment advisers (the Proposed CIP Rule).[2]

Under the Trump administration, we expect that Treasury will take further actions to reshape and modernize the AML/CFT regulatory framework, which has emerged as a regulatory priority for the Treasury Department. Indeed, in April, Treasury announced that the department, together with FinCEN and the Internal Revenue Service, would “take immediate action to eliminate 15 rules and guidance materials” as part of the administration’s agenda “to unleash American prosperity by reining in burdensome regulations.”[3] Since that announcement, Treasury Secretary Scott Bessent and Treasury officials have consistently advocated for modernizing AML/CFT compliance and reducing the overall regulatory burden for financial institutions.[4] For example, as discussed in our client update, certain federal banking agencies and FinCEN recently issued an order that would provide banks with more flexible options for complying with the CIP Rule. There was widespread speculation that the Trump administration would amend or rescind the Investment Adviser Rule,[5] and FinCEN’s decision to “revisit” the Investment Adviser Rule falls in line with the administration’s broader regulatory agenda.

It seems likely that FinCEN will revisit other AML/CFT rulemakings issued during the Biden administration, such as the final rule imposing reporting obligations for residential real estate transactions[6] and the July 2024 proposed rule that would amend AML/CFT program requirements for financial institutions regulated under the Bank Secrecy Act (BSA).[7]

Implications of the announcement

In August 2024, FinCEN issued the Investment Adviser Rule (discussed in our client update), which would, effective January 1, 2026, extend the AML/CFT compliance program and suspicious activity reporting requirements of the BSA to certain registered investment advisers and exempt reporting advisers (collectively, covered advisers). In May 2024, FinCEN and the SEC also issued (but never finalized) the Proposed CIP Rule that would have required covered advisers to establish written CIPs as part of their AML/CFT compliance programs. The Investment Adviser Rule itself was over two decades in the making, as FinCEN first proposed AML/CFT regulations for the investment adviser sector in 2002, and finalizing the regulations had been a priority of Treasury and FinCEN under the prior administration.[8]

FinCEN stated that the agency will “revisit the substance” of the Investment Adviser Rule to ensure it is “effectively tailored to the diverse business models and risk profiles of the investment adviser sector.” FinCEN intends to issue exceptive relief to covered advisers while it completes the rulemaking process to delay the effective date of the Investment Adviser Rule, and we expect the agency to do so in the near future. FinCEN did not specify a timeframe for its substantive amendments to the Investment Adviser Rule, however, stating only that it will revisit the scope “at a later date.” The agency concluded that extending the effective date until 2028 would “ease potential compliance costs” and uncertainty while FinCEN undertakes a broader review of the final rule. FinCEN also announced that it would revisit the Proposed CIP Rule, together with the SEC.

It remains to be seen when and how FinCEN will amend the Investment Adviser Rule, and in theory, FinCEN could decide to rescind the rule completely or extend the effective date again. We think it is more likely, though, that FinCEN would scale back compliance obligations under the Investment Adviser Rule, rather than eliminate the AML/CFT requirements entirely.[9]  However, all options are on the table, and the administration has already shown that it is willing to dramatically overhaul existing AML/CFT regulations.[10] 

We recommend that financial institutions continue to closely monitor Treasury and FinCEN’s announcements for developments.