Alert: FinCEN Delays IA AML Rule; SEC Proposes Updated “Small Entity” Definitions

Recent actions by FinCEN and the SEC provide important context for investment advisers monitoring regulatory timing and policy direction. FinCEN’s update formally codifies a previously proposed delay to the Investment Adviser AML Rule’s effective date, while the SEC’s proposal signals a potential shift in how regulatory impacts on advisers are evaluated in future rulemakings.

FinCEN Delays Investment Adviser AML Rule Effective Date

FinCEN has issued a final rule postponing the effective date of the Investment Adviser Anti-Money Laundering Rule from January 1, 2026, to January 1, 2028. Treasury indicated the extension will allow additional time to evaluate the rule’s scope and to coordinate with the customer identification program (CIP) rule.

For investment advisers, the delay provides additional time to assess operational impacts, evaluate vendors, and plan for AML program implementation. Firms should continue preparatory efforts, as regulators remain focused on governance, risk assessments, and controls relevant to financial crime risk.

SEC Proposes Updates to “Small Entity” Definitions

The SEC has proposed amendments to modernize the definition of “small entity” under the Regulatory Flexibility Act. For investment advisers, the proposal would increase the assets under management threshold from $25 million to $1 billion and update related Form ADV references. The SEC also proposes adjusting these thresholds for inflation every 10 years.

If adopted, the changes would expand the number of advisers considered small entities for regulatory impact analyses, potentially influencing how future SEC rulemakings assess compliance burdens and implementation considerations for advisory firms.

Bates Group assists investment advisers with SEC compliance, AML readiness, and regulatory change management. We help RIAs evaluate regulatory impact, perform gap assessments, and design scalable compliance programs aligned with evolving regulatory expectations. Contact Us Today to learn more