Transfer and Reorganization of Bank Secrecy Act Regulations-Technical Amendment., 10516-10522 [2011-4061]
Download as PDF
<![CDATA[
10516
*
*
Federal Register / Vol. 76, No. 38 / Friday, February 25, 2011 / Rules and Regulations
*
*
*
[FR Doc. 2011–3937 Filed 2–24–11; 8:45 am]
BILLING CODE 4510–26–P
DEPARTMENT OF THE TREASURY
Financial Crimes Enforcement Network
31 CFR Parts 1020, 1021, 1022, 1023,
1024, 1025, 1026, 1027, and 1028
RIN 1506–AA92
Transfer and Reorganization of Bank
Secrecy Act Regulations—Technical
Amendment.
Financial Crimes Enforcement
Network (FinCEN), Treasury.
ACTION: Final rule.
AGENCY:
FinCEN is issuing this final
rule as a technical amendment to new
Chapter X of Title 31 of the Code of
Federal Regulations, which was
published on October 26, 2010. After
that date, FinCEN published two final
rules in Part 103 of Title 31 of the Code
of Federal Regulations, one concerning
mutual funds and the other concerning
the confidentiality of a report of
suspicious activity (SAR). This final
rule moves the SAR confidentiality rule
from Part 103 to new Chapter X and
addresses the compliance date of the
mutual fund rule. Additionally, the
Chapter X Final Rule contained an
inadvertent typographical error that
omitted several sections from Subpart C
of Part 1026 Rules for Futures
Commission Merchants and Introducing
Brokers in Commodities. This final rule
corrects those omissions.
DATES: Effective Date: March 1, 2011.
FOR FURTHER INFORMATION CONTACT:
Regulatory Policy and Programs
Division, FinCEN (800) 949–2732 and
select option 6.
SUPPLEMENTARY INFORMATION:
srobinson on DSKHWCL6B1PROD with RULES
SUMMARY:
I. Background
On October 26, 2010, FinCEN issued
a final rule (‘‘the Chapter X Final Rule’’),
creating a new Chapter X in title 31 of
the Code of Federal Regulations (CFR)
for Bank Secrecy Act (BSA) regulations.
As discussed in the Chapter X Final
Rule, FinCEN is reorganizing its
regulations in new Chapter X to make
them more accessible for covered
individuals and financial institutions.
The reorganization is not intended to
have any substantive effect on the BSA
regulations. Chapter X will be effective
on March 1, 2011.1
1 See 75 FR 65806 (October 26, 2010) (Transfer
and Reorganization of Bank Secrecy Act
Regulations Final Rule).
VerDate Mar<15>2010
19:50 Feb 24, 2011
Jkt 223001
On April 14, 2010, FinCEN issued a
final rule to include mutual funds
within the general definition of
‘‘financial institution’’ in the BSA
regulations.2 On October 15, 2010,
FinCEN published a final rule extending
the compliance date for those provisions
of 31 CFR 103.33 that apply to mutual
funds from January 10, 2011 to April 10,
2011; however, this extension of the
compliance date has not otherwise
amended the applicable regulation.3
The regulatory changes made by
including mutual funds within the
general definition of ‘‘financial
institution’’ were contained in the
Chapter X Final Rule. The extended
compliance date for these provisions
still applies even though they have
moved to 31 CFR Chapter X.
On December 3, 2010, FinCEN issued
a final rule to amend the BSA
regulations regarding the confidentiality
of a report of suspicious activity
(‘‘SAR’’). To reflect the reorganization of
BSA rules in Chapter X, FinCEN is
issuing this technical amendment rule
to move the revised SAR confidentiality
rules, without any change to their
applicability date, to Chapter X.
As published, the Chapter X Final
Rule contains omissions from Subpart C
of Part 1026 Rules for Futures
Commission Merchants and Introducing
Brokers in Commodities. This final rule
corrects those omissions.
II. Effective Date
The effective date of this technical
amendment to Chapter X will be March
1, 2011. As noted above, this technical
amendment does not affect any of the
applicability dates of the rules that are
being moved to Chapter X by this
technical amendment.
III. Regulatory Matters
A. Executive Order 12866
It has been determined that this
rulemaking is not a significant
regulatory action for purposes of
Executive Order 12866. Accordingly, a
regulatory impact analysis is not
required.
B. Unfunded Mandates Reform Act of
1995
Section 202 of the Unfunded
Mandates Reform Act of 1995
(‘‘Unfunded Mandates Act’’), Public Law
104–4 (March 22, 1995), requires that an
agency prepare a budgetary impact
statement before promulgating a rule
that may result in expenditure by state,
local, and tribal governments, in the
2 See 75 FR 19241 (April 14, 2010) (Final Rule
defining Mutual Funds as Financial Institutions).
3 See 75 FR 63382.
PO 00000
Frm 00046
Fmt 4700
Sfmt 4700
aggregate, or by the private sector, of
$100 million or more in any one year.
If a budgetary impact statement is
required, section 202 of the Unfunded
Mandates Act also requires an agency to
identify and consider a reasonable
number of regulatory alternatives before
promulgating a rule. FinCEN has
determined that it is not required to
prepare a written statement under
Section 202 and has concluded that on
balance the rule provides the most costeffective and least burdensome
alternative to achieve the objectives of
the rule.
C. Regulatory Flexibility Act
Pursuant to the Regulatory Flexibility
Act (RFA) (5 U.S.C. 602 et seq.), FinCEN
certifies that this final regulation likely
will not have a significant economic
impact on a substantial number of small
entities. The regulatory changes in this
final rule merely restructure and recodify existing regulations and do not
alter current regulatory obligations.
D. Paperwork Reduction Act
This regulation contains no new
information collection requirements
subject to review and approval by the
Office of Management and Budget under
the Paperwork Reduction Act of 1995
(44 U.S.C. 3507(d) et seq.). The
information collection requirements for
the Bank Secrecy Act, currently codified
at 31 CFR Part 103, were previously
approved by the Office of Management
and Budget under OMB Control
numbers 1506–0001 through 1506–
0046. Under the Paperwork Reduction
Act, an agency may not conduct or
sponsor and a person is not required to
respond to a collection of information
unless it displays a valid OMB control
number.
List of Subjects in 31 CFR Parts 1020,
1021, 1022, 1023, 1024, 1025, 1026,
1027, and 1028
Administrative practice and
procedure, Banks, Banking, Brokers,
Currency, Foreign banking, Foreign
currencies, Gambling, Investigations,
Penalties, Reporting and recordkeeping
requirements, Securities, Terrorism.
Authority and Issuance
For the reasons set forth above, 31
CFR Chapter X, published October 26,
2010 (75 FR 65842), is amended as
follows:
PART 1020—RULE FOR BANKS
1. The authority citation for part 1020
is added to read as follows:
■
E:\FR\FM\25FER1.SGM
25FER1
Federal Register / Vol. 76, No. 38 / Friday, February 25, 2011 / Rules and Regulations
srobinson on DSKHWCL6B1PROD with RULES
Authority: 12 U.S.C. 1829b and 1951–1959;
31 U.S.C. 5311–5314 and 5316–5332; title III,
sec. 314, Pub. L. 107–56, 115 Stat. 307.
requires the bank to comply with the
Bank Secrecy Act or otherwise
authorizes the State authority to ensure
that the bank complies with the Bank
■ 2. Section 1020.320 is amended by:
Secrecy Act; or
■ a. Revising the last sentence of
(2) The underlying facts, transactions,
paragraph (d); and
and documents upon which a SAR is
■ b. Revising paragraphs (e) and (f); and
based, including but not limited to,
■ c. Adding new paragraph (g), to read
disclosures:
as follows:
(i) To another financial institution, or
§ 1020.320 Reports by banks of suspicious any director, officer, employee, or agent
transactions.
of a financial institution, for the
*
*
*
*
*
preparation of a joint SAR; or
(d) * * * A bank shall make all
(ii) In connection with certain
supporting documentation available to
employment references or termination
FinCEN or any Federal, State, or local
notices, to the full extent authorized in
law enforcement agency, or any Federal 31 U.S.C. 5318(g)(2)(B); or
(B) The sharing by a bank, or any
regulatory authority that examines the
director, officer, employee, or agent of
bank for compliance with the Bank
the bank, of a SAR, or any information
Secrecy Act, or any State regulatory
authority administering a State law that that would reveal the existence of a
SAR, within the bank’s corporate
requires the bank to comply with the
organizational structure for purposes
Bank Secrecy Act or otherwise
consistent with Title II of the Bank
authorizes the State authority to ensure
Secrecy Act as determined by regulation
that the institution complies with the
or in guidance.
Bank Secrecy Act, upon request.
(2) Prohibition on disclosures by
(e) Confidentiality of SARs. A SAR,
government authorities. A Federal,
and any information that would reveal
State, local, territorial, or Tribal
the existence of a SAR, are confidential
government authority, or any director,
and shall not be disclosed except as
officer, employee, or agent of any of the
authorized in this paragraph (e). For
foregoing, shall not disclose a SAR, or
purposes of this paragraph (e) only, a
any information that would reveal the
SAR shall include any suspicious
existence of a SAR, except as necessary
activity report filed with FinCEN
to fulfill official duties consistent with
pursuant to any regulation in this
Title II of the Bank Secrecy Act. For
chapter.
purposes of this section, ‘‘official duties’’
(1) Prohibition on disclosures by
shall not include the disclosure of a
banks—(i) General rule. No bank, and
SAR, or any information that would
no director, officer, employee, or agent
of any bank, shall disclose a SAR or any reveal the existence of a SAR, in
response to a request for disclosure of
information that would reveal the
non-public information or a request for
existence of a SAR. Any bank, and any
use in a private legal proceeding,
director, officer, employee, or agent of
including a request pursuant to 31 CFR
any bank that is subpoenaed or
1.11.
otherwise requested to disclose a SAR
(f) Limitation on liability. A bank, and
or any information that would reveal the
any director, officer, employee, or agent
existence of a SAR, shall decline to
of any bank, that makes a voluntary
produce the SAR or such information,
disclosure of any possible violation of
citing this section and 31 U.S.C.
law or regulation to a government
5318(g)(2)(A)(i), and shall notify
agency or makes a disclosure pursuant
FinCEN of any such request and the
to this section or any other authority,
response thereto.
including a disclosure made jointly with
(ii) Rules of Construction. Provided
that no person involved in any reported another institution, shall be protected
from liability to any person for any such
suspicious transaction is notified that
disclosure, or for failure to provide
the transaction has been reported, this
notice of such disclosure to any person
paragraph (e)(1) shall not be construed
identified in the disclosure, or both, to
as prohibiting:
the full extent provided by 31 U.S.C.
(A) The disclosure by a bank, or any
director, officer, employee, or agent of a 5318(g)(3).
(g) Compliance. Banks shall be
bank, of:
examined by FinCEN or its delegatees
(1) A SAR, or any information that
for compliance with this section. Failure
would reveal the existence of a SAR, to
to satisfy the requirements of this
FinCEN or any Federal, State, or local
law enforcement agency, or any Federal section may be a violation of the Bank
Secrecy Act and of this chapter. Such
regulatory authority that examines the
failure may also violate provisions of
bank for compliance with the Bank
Title 12 of the Code of Federal
Secrecy Act, or any State regulatory
authority administering a State law that Regulations.
VerDate Mar<15>2010
19:50 Feb 24, 2011
Jkt 223001
PO 00000
Frm 00047
Fmt 4700
Sfmt 4700
10517
PART 1021—RULES FOR CASINOS
AND CARD CLUBS
3. The authority citation for part 1021
is added to read as follows:
■
Authority: 12 U.S.C. 1829b and 1951–1959;
31 U.S.C. 5311–5314 and 5316–5332; title III,
sec. 314, Pub. L. 107–56, 115 Stat. 307.
4. Section 1021.320 is amended by:
a. Revising the last sentence of
paragraph (d)
■ b. Revising paragraph (e);
■ c. Redesignating paragraphs (f) and (g)
as paragraphs (g) and (h);
■ d. Adding new paragraph (f); and
■ e. Revising newly designated
paragraph (g).
■
■
§ 1021.320 Reports by casinos of
suspicious transactions.
*
*
*
*
*
(d) * * * A casino shall make all
supporting documentation available to
FinCEN or any Federal, State, or local
law enforcement agency, or any Federal
regulatory authority that examines the
casino for compliance with the Bank
Secrecy Act, or any State regulatory
authority administering a State law that
requires the casino to comply with the
Bank Secrecy Act or otherwise
authorizes the State authority to ensure
that the casino complies with the Bank
Secrecy Act, or any tribal regulatory
authority administering a tribal law that
requires the casino to comply with the
Bank Secrecy Act or otherwise
authorizes the tribal regulatory authority
to ensure that the casino complies with
the Bank Secrecy Act, upon request.
(e) Confidentiality of SARs. A SAR,
and any information that would reveal
the existence of a SAR, are confidential
and shall not be disclosed except as
authorized in this paragraph (e). For
purposes of this paragraph (e) only, a
SAR shall include any suspicious
activity report filed with FinCEN
pursuant to any regulation in this
chapter.
(1) Prohibition on disclosures by
casinos—(i) General rule. No casino,
and no director, officer, employee, or
agent of any casino, shall disclose a SAR
or any information that would reveal the
existence of a SAR. Any casino, and any
director, officer, employee, or agent of
any casino that is subpoenaed or
otherwise requested to disclose a SAR
or any information that would reveal the
existence of a SAR, shall decline to
produce the SAR or such information,
citing this section and 31 U.S.C.
5318(g)(2)(A)(i), and shall notify
FinCEN of any such request and the
response thereto.
(ii) Rules of Construction. Provided
that no person involved in any reported
E:\FR\FM\25FER1.SGM
25FER1
srobinson on DSKHWCL6B1PROD with RULES
10518
Federal Register / Vol. 76, No. 38 / Friday, February 25, 2011 / Rules and Regulations
suspicious transaction is notified that
the transaction has been reported, this
paragraph (e)(1) shall not be construed
as prohibiting:
(A) The disclosure by a casino, or any
director, officer, employee, or agent of a
casino, of:
(1) A SAR, or any information that
would reveal the existence of a SAR, to
FinCEN or any Federal, State, or local
law enforcement agency, or any Federal
regulatory authority that examines the
casino for compliance with the Bank
Secrecy Act, or any State regulatory
authority administering a State law that
requires the casino to comply with the
Bank Secrecy Act or otherwise
authorizes the State authority to ensure
that the casino complies with the Bank
Secrecy Act, or any tribal regulatory
authority administering a tribal law that
requires the casino to comply with the
Bank Secrecy Act or otherwise
authorizes the tribal regulatory authority
to ensure that casino complies with the
Bank Secrecy Act; or
(2) The underlying facts, transactions,
and documents upon which a SAR is
based, including but not limited to,
disclosures to another financial
institution, or any director, officer,
employee, or agent of a financial
institution, for the preparation of a joint
SAR.
(B) The sharing by a casino, or any
director, officer, employee, or agent of
the casino, of a SAR, or any information
that would reveal the existence of a
SAR, within the casino’s corporate
organizational structure for purposes
consistent with Title II of the Bank
Secrecy Act as determined by regulation
or in guidance.
(2) Prohibition on disclosures by
government authorities. A Federal,
State, local, territorial, or Tribal
government authority, or any director,
officer, employee, or agent of any of the
foregoing, shall not disclose a SAR, or
any information that would reveal the
existence of a SAR, except as necessary
to fulfill official duties consistent with
Title II of the Bank Secrecy Act (BSA).
For purposes of this section, ‘‘official
duties’’ shall not include the disclosure
of a SAR, or any information that would
reveal the existence of a SAR, in
response to a request for disclosure of
non-public information or a request for
use in a private legal proceeding,
including a request pursuant to 31 CFR
1.11.
(f) Limitation on liability. A casino,
and any director, officer, employee, or
agent of any casino, that makes a
voluntary disclosure of any possible
violation of law or regulation to a
government agency or makes a
disclosure pursuant to this section or
VerDate Mar<15>2010
19:50 Feb 24, 2011
Jkt 223001
any other authority, including a
disclosure made jointly with another
institution, shall be protected from
liability to any person for any such
disclosure, or for failure to provide
notice of such disclosure to any person
identified in the disclosure, or both, to
the full extent provided by 31 U.S.C.
5318(g)(3).
(g) Compliance. Casinos shall be
examined by FinCEN or its delegatees
for compliance with this section. Failure
to satisfy the requirements of this
section may be a violation of the Bank
Secrecy Act and of this chapter.
*
*
*
*
*
PART 1022—RULES FOR MONEY
SERVICES BUSINESSES
5. The authority citation for part 1022
is added to read as follows:
■
Authority: 12 U.S.C. 1829b and 1951–
1959; 31 U.S.C. 5311–5314 and 5316–5332;
title III, sec. 314, Pub. L. 107–56, 115 Stat.
307.
6. Section 1022.320 is amended by:
a. Revising the last sentence of
paragraph (c);
■ b. Revising paragraph (d);
■ c. Redesignating paragraphs (e) and (f)
as paragraphs (f) and (g);
■ d. Adding new paragraph (e); and
■ e. Revising newly designated
paragraph (f), to read as follows:
■
■
§ 1022.320 Reports by money services
businesses of suspicious transactions.
*
*
*
*
*
(c) * * * A money services business
shall make all supporting
documentation available to FinCEN or
any Federal, State, or local law
enforcement agency, or any Federal
regulatory authority that examines the
money services business for compliance
with the Bank Secrecy Act, or any State
regulatory authority administering a
State law that requires the money
services business to comply with the
Bank Secrecy Act or otherwise
authorizes the State authority to ensure
that the money services business
complies with the Bank Secrecy Act.
(d) Confidentiality of SARs. A SAR,
and any information that would reveal
the existence of a SAR, are confidential
and shall not be disclosed except as
authorized in this paragraph (d). For
purposes of this paragraph (d) only, a
SAR shall include any suspicious
activity report filed with FinCEN
pursuant to any regulation in this
chapter.
(1) Prohibition on disclosures by
money services businesses—(i) General
rule. No money services business, and
no director, officer, employee, or agent
of any money services business, shall
PO 00000
Frm 00048
Fmt 4700
Sfmt 4700
disclose a SAR or any information that
would reveal the existence of a SAR.
Any money services business, and any
director, officer, employee, or agent of
any money services business that is
subpoenaed or otherwise requested to
disclose a SAR or any information that
would reveal the existence of a SAR,
shall decline to produce the SAR or
such information, citing this section and
31 U.S.C. 5318(g)(2)(A)(i), and shall
notify FinCEN of any such request and
the response thereto.
(ii) Rules of Construction. Provided
that no person involved in any reported
suspicious transaction is notified that
the transaction has been reported, this
paragraph (d)(1) shall not be construed
as prohibiting:
(A) The disclosure by a money
services business, or any director,
officer, employee, or agent of a money
services business, of:
(1) A SAR, or any information that
would reveal the existence of a SAR, to
FinCEN or any Federal, State, or local
law enforcement agency, or any Federal
regulatory authority that examines the
money services business for compliance
with the Bank Secrecy Act, or any State
regulatory authority administering a
State law that requires the money
services business to comply with the
Bank Secrecy Act or otherwise
authorizes the State authority to ensure
that the money services business
complies with the Bank Secrecy Act; or
(2) The underlying facts, transactions,
and documents upon which a SAR is
based, including but not limited to,
disclosures to another financial
institution, or any director, officer,
employee, or agent of a financial
institution, for the preparation of a joint
SAR.
(B) The sharing by a money services
business, or any director, officer,
employee, or agent of the money
services business, of a SAR, or any
information that would reveal the
existence of a SAR, within the money
services business’s corporate
organizational structure for purposes
consistent with Title II of the Bank
Secrecy Act as determined by regulation
or in guidance.
(2) Prohibition on disclosures by
government authorities. A Federal,
State, local, territorial, or Tribal
government authority, or any director,
officer, employee, or agent of any of the
foregoing, shall not disclose a SAR, or
any information that would reveal the
existence of a SAR, except as necessary
to fulfill official duties consistent with
Title II of the Bank Secrecy Act. For
purposes of this section, ‘‘official duties’’
shall not include the disclosure of a
SAR, or any information that would
E:\FR\FM\25FER1.SGM
25FER1
Federal Register / Vol. 76, No. 38 / Friday, February 25, 2011 / Rules and Regulations
reveal the existence of a SAR, in
response to a request for disclosure of
non-public information or a request for
use in a private legal proceeding,
including a request pursuant to 31 CFR
1.11.
(e) Limitation on liability. A money
services business, and any director,
officer, employee, or agent of any money
services business, that makes a
voluntary disclosure of any possible
violation of law or regulation to a
government agency or makes a
disclosure pursuant to this section or
any other authority, including a
disclosure made jointly with another
institution, shall be protected from
liability to any person for any such
disclosure, or for failure to provide
notice of such disclosure to any person
identified in the disclosure, or both, to
the full extent provided by 31 U.S.C.
5318(g)(3).
(f) Compliance. Money services
businesses shall be examined by
FinCEN or its delegatees for compliance
with this section. Failure to satisfy the
requirements of this section may be a
violation of the Bank Secrecy Act and of
this chapter.
*
*
*
*
*
PART 1023—RULES FOR BROKERS
OR DEALERS IN SECURITIES
7. The authority citation for part 1023
is added to read as follows:
■
Authority: 12 U.S.C. 1829b and 1951–1959;
31 U.S.C. 5311–5314 and 5316–5332; title III,
sec. 314, Pub. L. 107–56, 115 Stat. 307.
8. Section 1023.320 is amended by
revising the last sentence in paragraph
(d), and by revising paragraphs (e), (f),
and (g) to read as follows:
■
§ 1023.320 Reports by brokers or dealers
in securities of suspicious transactions.
srobinson on DSKHWCL6B1PROD with RULES
*
*
*
*
*
(d) * * * A broker-dealer shall make
all supporting documentation available
to FinCEN or any Federal, State, or local
law enforcement agency, or any Federal
regulatory authority that examines the
broker-dealer for compliance with the
Bank Secrecy Act, upon request; or to
any SRO that examines the brokerdealer for compliance with the
requirements of this section, upon the
request of the Securities and Exchange
Commission.
(e) Confidentiality of SARs. A SAR,
and any information that would reveal
the existence of a SAR, are confidential
and shall not be disclosed except as
authorized in this paragraph (e). For
purposes of this paragraph (e) only, a
SAR shall include any suspicious
activity report filed with FinCEN
VerDate Mar<15>2010
19:50 Feb 24, 2011
Jkt 223001
pursuant to any regulation in this
chapter.
(1) Prohibition on disclosures by
brokers or dealers in securities. (i)
General rule. No broker-dealer, and no
director, officer, employee, or agent of
any broker-dealer, shall disclose a SAR
or any information that would reveal the
existence of a SAR. Any broker-dealer,
and any director, officer, employee, or
agent of any broker-dealer that is
subpoenaed or otherwise requested to
disclose a SAR or any information that
would reveal the existence of a SAR,
shall decline to produce the SAR or
such information, citing this section and
31 U.S.C. 5318(g)(2)(A)(i), and shall
notify FinCEN of any such request and
the response thereto.
(ii) Rules of Construction. Provided
that no person involved in any reported
suspicious transaction is notified that
the transaction has been reported, this
paragraph (e)(1) shall not be construed
as prohibiting:
(A) The disclosure by a broker-dealer,
or any director, officer, employee, or
agent of a broker-dealer, of:
(1) A SAR, or any information that
would reveal the existence of a SAR, to
FinCEN or any Federal, State, or local
law enforcement agency, or any Federal
regulatory authority that examines the
broker-dealer for compliance with the
Bank Secrecy Act; or to any SRO that
examines the broker-dealer for
compliance with the requirements of
this section, upon the request of the
Securities Exchange Commission; or
(2) The underlying facts, transactions,
and documents upon which a SAR is
based, including but not limited to,
disclosures:
(i) To another financial institution, or
any director, officer, employee, or agent
of a financial institution, for the
preparation of a joint SAR; or
(ii) In connection with certain
employment references or termination
notices, to the full extent authorized in
31 U.S.C. 5318(g)(2)(B); or
(B) The sharing by a broker-dealer, or
any director, officer, employee, or agent
of the broker-dealer, of a SAR, or any
information that would reveal the
existence of a SAR, within the brokerdealer’s corporate organizational
structure for purposes consistent with
Title II of the Bank Secrecy Act as
determined by regulation or in
guidance.
(2) Prohibition on disclosures by
government authorities. A Federal,
State, local, territorial, or Tribal
government authority, or any director,
officer, employee, or agent of any of the
foregoing, shall not disclose a SAR, or
any information that would reveal the
existence of a SAR, except as necessary
PO 00000
Frm 00049
Fmt 4700
Sfmt 4700
10519
to fulfill official duties consistent with
Title II of the Bank Secrecy Act. For
purposes of this section, ‘‘official duties’’
shall not include the disclosure of a
SAR, or any information that would
reveal the existence of a SAR, in
response to a request for disclosure of
non-public information or a request for
use in a private legal proceeding,
including a request pursuant to 31 CFR
1.11.
(3) Prohibition on disclosures by SelfRegulatory Organizations. Any selfregulatory organization registered with
the Securities and Exchange
Commission, or any director, officer,
employee, or agent of any of the
foregoing, shall not disclose a SAR, or
any information that would reveal the
existence of a SAR except as necessary
to fulfill self-regulatory duties with the
consent of the Securities Exchange
Commission, in a manner consistent
with Title II of the Bank Secrecy Act.
For purposes of this section, ‘‘selfregulatory duties’’ shall not include the
disclosure of a SAR, or any information
that would reveal the existence of a
SAR, in response to a request for
disclosure of non-public information or
a request for use in a private legal
proceeding.
(f) Limitation on liability. A brokerdealer, and any director, officer,
employee, or agent of any broker-dealer,
that makes a voluntary disclosure of any
possible violation of law or regulation to
a government agency or makes a
disclosure pursuant to this section or
any other authority, including a
disclosure made jointly with another
institution, shall be protected from
liability to any person for any such
disclosure, or for failure to provide
notice of such disclosure to any person
identified in the disclosure, or both, to
the full extent provided by 31 U.S.C.
5318(g)(3).
(g) Compliance. Broker-dealers shall
be examined by FinCEN or its
delegatees for compliance with this
section. Failure to satisfy the
requirements of this section may be a
violation of the Bank Secrecy Act and of
this chapter.
*
*
*
*
*
PART 1024—RULES FOR MUTUAL
FUNDS
9. The authority citation for part 1024
is added to read as follows:
■
Authority: 12 U.S.C. 1829b and 1951–
1959; 31 U.S.C. 5311–5314 and 5316–5332;
title III, sec. 314, Pub. L. 107–56, 115 Stat.
307.
■
10. Section 1024.320 is amended by:
E:\FR\FM\25FER1.SGM
25FER1
10520
Federal Register / Vol. 76, No. 38 / Friday, February 25, 2011 / Rules and Regulations
a. Revising the last sentence of
paragraph (c); and
■ b. Revising paragraphs (d), (e), and (f),
to read as follows:
■
§ 1024.320 Reports by mutual funds of
suspicious transactions.
srobinson on DSKHWCL6B1PROD with RULES
*
*
*
*
*
(c) * * * The mutual fund shall make
all supporting documentation available
to FinCEN or any Federal, State, or local
law enforcement agency, or any Federal
regulatory authority that examines the
mutual fund for compliance with the
Bank Secrecy Act, upon request.
(d) Confidentiality of SARs. A SAR,
and any information that would reveal
the existence of a SAR, are confidential
and shall not be disclosed except as
authorized in this paragraph (d). For
purposes of this paragraph (d) only, a
SAR shall include any suspicious
activity report filed with FinCEN
pursuant to any regulation in this
chapter.
(1) Prohibition on disclosures by
mutual funds—(i) General rule. No
mutual fund, and no director, officer,
employee, or agent of any mutual fund,
shall disclose a SAR or any information
that would reveal the existence of a
SAR. Any mutual fund, and any
director, officer, employee, or agent of
any mutual fund that is subpoenaed or
otherwise requested to disclose a SAR
or any information that would reveal the
existence of a SAR, shall decline to
produce the SAR or such information,
citing this section and 31 U.S.C.
5318(g)(2)(A)(i), and shall notify
FinCEN of any such request and the
response thereto.
(ii) Rules of construction. Provided
that no person involved in any reported
suspicious transaction is notified that
the transaction has been reported, this
paragraph (d)(1) shall not be construed
as prohibiting:
(A) The disclosure by a mutual fund,
or any director, officer, employee, or
agent of a mutual fund, of:
(1) A SAR, or any information that
would reveal the existence of a SAR, to
FinCEN or any Federal, State, or local
law enforcement agency, or any Federal
regulatory authority that examines the
mutual fund for compliance with the
Bank Secrecy Act; or
(2) The underlying facts, transactions,
and documents upon which a SAR is
based, including but not limited to,
disclosures to another financial
institution, or any director, officer,
employee, or agent of a financial
institution, for the preparation of a joint
SAR; or
(B) The sharing by a mutual fund, or
any director, officer, employee, or agent
of the mutual fund, of a SAR, or any
VerDate Mar<15>2010
19:50 Feb 24, 2011
Jkt 223001
information that would reveal the
existence of a SAR, within the mutual
fund’s corporate organizational
structure for purposes consistent with
Title II of the Bank Secrecy Act as
determined by regulation or in
guidance.
(2) Prohibition on disclosures by
government authorities. A Federal,
State, local, territorial, or Tribal
government authority, or any director,
officer, employee, or agent of any of the
foregoing, shall not disclose a SAR, or
any information that would reveal the
existence of a SAR, except as necessary
to fulfill official duties consistent with
Title II of the Bank Secrecy Act. For
purposes of this section, ‘‘official duties’’
shall not include the disclosure of a
SAR, or any information that would
reveal the existence of a SAR, in
response to a request for disclosure of
non-public information or a request for
use in a private legal proceeding,
including a request pursuant to 31 CFR
1.11.
(e) Limitation on liability. A mutual
fund, and any director, officer,
employee, or agent of any mutual fund,
that makes a voluntary disclosure of any
possible violation of law or regulation to
a government agency or makes a
disclosure pursuant to this section or
any other authority, including a
disclosure made jointly with another
institution, shall be protected from
liability to any person for any such
disclosure, or for failure to provide
notice of such disclosure to any person
identified in the disclosure, or both, to
the full extent provided by 31 U.S.C.
5318(g)(3).
(f) Compliance. Mutual funds shall be
examined by FinCEN or its delegatees
for compliance with this section. Failure
to satisfy the requirements of this
section may be a violation of the Bank
Secrecy Act and of this chapter.
*
*
*
*
*
PART 1025—RULES FOR INSURANCE
COMPANIES
11. The authority citation for part
1025 is added to read as follows:
■
Authority: 12 U.S.C. 1829b and 1951–1959;
31 U.S.C. 5311–5314 and 5316–5332; title III,
sec. 314, Pub. L. 107–56, 115 Stat. 307.
12. Section 1025.320 is amended by:
a. Revising the last sentence of
paragraph (d);
■ b. Revising paragraph (e);
■ c. Redesignating paragraphs (f)
through (h) as paragraphs (g) through (i);
■ d. Adding new paragraph (f); and
■ e. Revising newly designated
paragraph (g), to read as follows:
■
■
PO 00000
Frm 00050
Fmt 4700
Sfmt 4700
§ 1025.320 Reports by insurance
companies of suspicious transactions.
*
*
*
*
*
(d) * * * An insurance company
shall make all supporting
documentation available to FinCEN or
any Federal, State, or local law
enforcement agency, or any Federal
regulatory authority that examines the
insurance company for compliance with
the Bank Secrecy Act, or any State
regulatory authority administering a
State law that requires the insurance
company to comply with the Bank
Secrecy Act or otherwise authorizes the
State authority to ensure that the
institution complies with the Bank
Secrecy Act, upon request.
(e) Confidentiality of SARs. A SAR,
and any information that would reveal
the existence of a SAR, are confidential
and shall not be disclosed except as
authorized in this paragraph (e). For
purposes of this paragraph (e) only, a
SAR shall include any suspicious
activity report filed with FinCEN
pursuant to any regulation in this
chapter.
(1) Prohibition on disclosures by
insurance companies—(i) General rule.
No insurance company, and no director,
officer, employee, or agent of any
insurance company, shall disclose a
SAR or any information that would
reveal the existence of a SAR. Any
insurance company, and any director,
officer, employee, or agent of any
insurance company that is subpoenaed
or otherwise requested to disclose a
SAR or any information that would
reveal the existence of a SAR, shall
decline to produce the SAR or such
information, citing this section and 31
U.S.C. 5318(g)(2)(A)(i), and shall notify
FinCEN of any such request and the
response thereto.
(ii) Rules of Construction. Provided
that no person involved in any reported
suspicious transaction is notified that
the transaction has been reported, this
paragraph (e)(1) shall not be construed
as prohibiting:
(A) The disclosure by an insurance
company, or any director, officer,
employee, or agent of an insurance
company, of:
(1) A SAR, or any information that
would reveal the existence of a SAR, to
FinCEN or any Federal, State, or local
law enforcement agency, or any Federal
regulatory authority that examines the
insurance company for compliance with
the Bank Secrecy Act, or any State
regulatory authority administering a
State law that requires the insurance
company to comply with the Bank
Secrecy Act or otherwise authorizes the
State authority to ensure that the
E:\FR\FM\25FER1.SGM
25FER1
srobinson on DSKHWCL6B1PROD with RULES
Federal Register / Vol. 76, No. 38 / Friday, February 25, 2011 / Rules and Regulations
institution complies with the Bank
Secrecy Act; or
(2) The underlying facts, transactions,
and documents upon which a SAR is
based, including but not limited to,
disclosures to another financial
institution, or any director, officer,
employee, or agent of a financial
institution, for the preparation of a joint
SAR.
(B) The sharing by an insurance
company, or any director, officer,
employee, or agent of the insurance
company, of a SAR, or any information
that would reveal the existence of a
SAR, within the insurance company’s
corporate organizational structure for
purposes consistent with Title II of the
Bank Secrecy Act as determined by
regulation or in guidance.
(2) Prohibition on disclosures by
government authorities. A Federal,
State, local, territorial, or Tribal
government authority, or any director,
officer, employee, or agent of any of the
foregoing, shall not disclose a SAR, or
any information that would reveal the
existence of a SAR, except as necessary
to fulfill official duties consistent with
Title II of the Bank Secrecy Act. For
purposes of this section, ‘‘official duties’’
shall not include the disclosure of a
SAR, or any information that would
reveal the existence of a SAR, in
response to a request for disclosure of
non-public information or a request for
use in a private legal proceeding,
including a request pursuant to 31 CFR
1.11.
(f) Limitation on liability. An
insurance company, and any director,
officer, employee, or agent of any
insurance company, that makes a
voluntary disclosure of any possible
violation of law or regulation to a
government agency or makes a
disclosure pursuant to this section or
any other authority, including a
disclosure made jointly with another
institution, shall be protected from
liability to any person for any such
disclosure, or for failure to provide
notice of such disclosure to any person
identified in the disclosure, or both, to
the full extent provided by 31 U.S.C.
5318(g)(3).
(g) Compliance. Insurance companies
shall be examined by FinCEN or its
delegatees for compliance with this
section. Failure to satisfy the
requirements of this section may be a
violation of the Bank Secrecy Act and of
this chapter.
*
*
*
*
*
VerDate Mar<15>2010
19:50 Feb 24, 2011
Jkt 223001
PART 1026—RULES FOR FUTURES
COMMISSION MERCHANTS AND
INTRODUCING BROKERS IN
COMMODITIES
13. The authority citation for part
1026 is added to read as follows:
■
Authority: 12 U.S.C. 1829b and 1951–1959;
31 U.S.C. 5311–5314 and 5316–5332; title III,
sec. 314, Pub. L. 107–56, 115 Stat. 307.
14. Sections 1026.311, 1026.312,
1026.313 and 1026.314 are added to
Subpart C to read as follows:
■
§ 1026.311
Filing obligations.
Refer to § 1010.311 of this Chapter for
reports of transactions in currency filing
obligations for futures commission
merchants and introducing brokers in
commodities.
§ 1026.312
Identification required.
Refer to § 1010.312 of this Chapter for
identification requirements for reports
of transactions in currency filed by
futures commission merchants and
introducing brokers in commodities.
§ 1026.313
Aggregation.
Refer to § 1010.313 of this Chapter for
reports of transactions in currency
aggregation requirements for futures
commission merchants and introducing
brokers in commodities.
§ 1026.314
Structured transactions.
Refer to § 1010.314 of this Chapter for
rules regarding structured transactions
for futures commission merchants and
introducing brokers in commodities.
■ 15. Section 1026.320 is amended by
revising the last sentence in paragraph
(d), and by revising paragraphs (e), (f),
and (g) to read as follows:
§ 1026.320 Reports by futures commission
merchants and introducing brokers in
commodities of suspicious transactions.
*
*
*
*
*
(d) * * * An FCM or IB–C shall make
all supporting documentation available
to FinCEN or any Federal, State, or local
law enforcement agency, or any Federal
regulatory authority that examines the
FCM or IB–C for compliance with the
BSA, upon request; or to any registered
futures association or registered entity
(as defined in the Commodity Exchange
Act, 7 U.S.C. 21 and 7 U.S.C. 1(a)(29))
(collectively, a self-regulatory
organization (‘‘SRO’’)) that examines the
FCM or IB–C for compliance with the
requirements of this section, upon the
request of the Commodity Futures
Trading Commission.
(e) Confidentiality of SARs. A SAR,
and any information that would reveal
the existence of a SAR, are confidential
and shall not be disclosed except as
PO 00000
Frm 00051
Fmt 4700
Sfmt 4700
10521
authorized in this paragraph (e). For
purposes of this paragraph (e) only, a
SAR shall include any suspicious
activity report filed with FinCEN
pursuant to any regulation in this
chapter.
(1) Prohibition on disclosures by
futures commission merchants and
introducing brokers in commodities—(i)
General rule. No FCM or IB–C, and no
director, officer, employee, or agent of
any FCM or IB–C, shall disclose a SAR
or any information that would reveal the
existence of a SAR. Any FCM or IB–C,
and any director, officer, employee, or
agent of any FCM or IB–C that is
subpoenaed or otherwise requested to
disclose a SAR or any information that
would reveal the existence of a SAR,
shall decline to produce the SAR or
such information, citing this section and
31 U.S.C. 5318(g)(2)(A)(i), and shall
notify FinCEN of any such request and
the response thereto.
(ii) Rules of Construction. Provided
that no person involved in any reported
suspicious transaction is notified that
the transaction has been reported, this
paragraph (e)(1) shall not be construed
as prohibiting:
(A) The disclosure by an FCM or IB–
C, or any director, officer, employee, or
agent of an FCM or IB–C, of:
(1) A SAR, or any information that
would reveal the existence of a SAR, to
FinCEN or any Federal, State, or local
law enforcement agency, or any Federal
regulatory authority that examines the
FCM or IB–C for compliance with the
BSA; or to any SRO that examines the
FCM or IB–C for compliance with the
requirements of this section, upon the
request of the Commodity Futures
Trading Commission; or
(2) The underlying facts, transactions,
and documents upon which a SAR is
based, including but not limited to,
disclosures:
(i) To another financial institution, or
any director, officer, employee, or agent
of a financial institution, for the
preparation of a joint SAR; or
(ii) In connection with certain
employment references or termination
notices, to the full extent authorized in
31 U.S.C. 5318(g)(2)(B); or
(B) The sharing by an FCM or IB–C,
or any director, officer, employee, or
agent of the FCM or IB–C, of a SAR, or
any information that would reveal the
existence of a SAR, within the FCM’s or
IB–C’s corporate organizational
structure for purposes consistent with
Title II of the BSA as determined by
regulation or in guidance.
(2) Prohibition on disclosures by
government authorities. A Federal,
State, local, territorial, or Tribal
government authority, or any director,
E:\FR\FM\25FER1.SGM
25FER1
10522
Federal Register / Vol. 76, No. 38 / Friday, February 25, 2011 / Rules and Regulations
srobinson on DSKHWCL6B1PROD with RULES
officer, employee, or agent of any of the
foregoing, shall not disclose a SAR, or
any information that would reveal the
existence of a SAR, except as necessary
to fulfill official duties consistent with
Title II of the BSA. For purposes of this
section, ‘‘official duties’’ shall not
include the disclosure of a SAR, or any
information that would reveal the
existence of a SAR, in response to a
request for disclosure of non-public
information or a request for use in a
private legal proceeding, including a
request pursuant to 31 CFR 1.11.
(3) Prohibition on disclosures by SelfRegulatory Organizations. Any selfregulatory organization registered with
or designated by the Commodity
Futures Trading Commission, or any
director, officer, employee, or agent of
any of the foregoing, shall not disclose
a SAR, or any information that would
reveal the existence of a SAR except as
necessary to fulfill self-regulatory duties
upon the request of the Commodity
Futures Trading Commission, in a
manner consistent with Title II of the
BSA. For purposes of this section, ‘‘selfregulatory duties’’ shall not include the
disclosure of a SAR, or any information
that would reveal the existence of a
SAR, in response to a request for
disclosure of non-public information or
a request for use in a private legal
proceeding.
(f) Limitation on liability. An FCM or
IB–C, and any director, officer,
employee, or agent of any FCM or IB–
C, that makes a voluntary disclosure of
any possible violation of law or
regulation to a government agency or
makes a disclosure pursuant to this
section or any other authority, including
a disclosure made jointly with another
institution, shall be protected from
liability to any person for any such
disclosure, or for failure to provide
notice of such disclosure to any person
identified in the disclosure, or both, to
the full extent provided by 31 U.S.C.
5318(g)(3).
(g) Compliance. FCMs or IB–Cs shall
be examined by FinCEN or its
delegatees for compliance with this
section. Failure to satisfy the
requirements of this section may be a
violation of the Bank Secrecy Act and of
this chapter.
*
*
*
*
*
PART 1027—RULES FOR DEALERS IN
PRECIOUS METALS, PRECIOUS
STONES, OR JEWELS
16. The authority citation for part
1027 is added to read as follows:
■
Authority: 12 U.S.C. 1829b and 1951–1959;
31 U.S.C. 5311–5314 and 5316–5332; title III,
sec. 314, Pub. L. 107–56, 115 Stat. 307.
VerDate Mar<15>2010
19:50 Feb 24, 2011
Jkt 223001
PART 1028—RULES FOR OPERATORS
OF CREDIT CARD SYSTEMS
17. The authority citation for part
1028 is added to read as follows:
■
Authority: 12 U.S.C. 1829b and 1951–1959;
31 U.S.C. 5311–5314 and 5316–5332; title III,
sec. 314, Pub. L. 107–56, 115 Stat. 307.
Dated: February 16, 2011.
James H. Freis, Jr.,
Director, Financial Crimes Enforcement
Network.
[FR Doc. 2011–4061 Filed 2–24–11; 8:45 am]
BILLING CODE 4810–02–P
DEPARTMENT OF DEFENSE
Department of the Army, Corps of
Engineers
33 CFR Part 334
Naval Surface Warfare Center, Upper
Machodoc Creek and the Potomac
River, Dahlgren, VA; Danger Zone
AGENCY:
U.S. Army Corps of Engineers,
DoD.
ACTION:
Final rule.
The U.S. Army Corps of
Engineers is amending its regulations
for the existing danger zone in the
vicinity of Naval Surface Warfare
Center, Dahlgren, in King George
County, Virginia. The amendment
changes the description of the
hazardous operations in the area, the
hours of operation, and expands the
boundaries of a portion of the danger
zone. The amendment is necessary to
protect the public from potentially
hazardous conditions which may exist
as a result of use of the areas by the
United States Navy.
DATES: Effective Date: March 28, 2011.
FOR FURTHER INFORMATION CONTACT: Mr.
David B. Olson, Headquarters,
Operations and Regulatory Community
of Practice, Washington, DC at 202–761–
4922 or by e-mail at
david.b.olson@usace.army.mil, or Mr.
Robert Berg, Corps of Engineers, Norfolk
District, Regulatory Branch, at 757–201–
7793 or by e-mail at
robert.a.berg@usace.army.mil.
SUPPLEMENTARY INFORMATION: Pursuant
to its authorities in Section 7 of the
Rivers and Harbors Act of 1917 (40 Stat.
266; 33 U.S.C. 1) and Chapter XIX of the
Army Appropriations Act of 1919 (40
Stat. 892; 33 U.S.C. 3), the Corps is
amending the danger zone regulations at
33 CFR 334.230 to: Expand the
description of continuing hazardous
operations in the danger zone to include
firing of large or small caliber guns and
SUMMARY:
PO 00000
Frm 00052
Fmt 4700
Sfmt 4700
projectiles, aerial bombing, directed
energy technology, and manned or
unmanned water craft operations;
expand the Middle Danger Zone farther
into Upper Machodoc Creek where
operations involving directed energy,
watercraft maneuvers and transportation
of explosives are conducted; add a 100yard buffer to prevent public contact
with unexploded ordinance along the
shoreline of the Naval Facility within
the Middle Danger Zone; and extend
normal hours of operation of hazardous
operations from 4 p.m. to 5 p.m. The
danger zone represents a public safety
buffer beyond the physical boundaries
of the test range to further reduce the
safety threat to the boating public.
The proposed rule was published in
the November 10, 2010, issue of the
Federal Register (75 FR 69033) with the
docket number COE–2010–0038 and no
comments were received.
Procedural Requirements
a. Review Under Executive Order 12866
This final rule is issued with respect
to a military function of the Defense
Department and the provisions of
Executive Order 12866 do not apply.
b. Review Under the Regulatory
Flexibility Act
This final rule has been reviewed
under the Regulatory Flexibility Act
(Pub. L. 96–354) which requires the
preparation of a regulatory flexibility
analysis for any regulation that will
have a significant economic impact on
a substantial number of small entities
(i.e., small businesses and small
governments). The economic impact of
the amendment to this danger zone does
not have an effect on the public, does
not result in a navigational hazard, or
interfere with existing waterway traffic.
Therefore, this final rule does not have
a significant economic impact on small
entities.
c. Review Under the National
Environmental Policy Act
Due to the administrative nature of
this action and because there is no
intended change in the use of the area,
the Corps determined the amendment
does not have a significant impact on
the quality of the human environment
and, therefore, preparation of an
environmental impact statement is not
required. An environmental assessment
was prepared after the public notice
period closed. The environmental
assessment may be reviewed at the
District office listed at the end of the
FOR FURTHER INFORMATION CONTACT
section, above.
E:\FR\FM\25FER1.SGM
25FER1
]]>Agencies
[Federal Register Volume 76, Number 38 (Friday, February 25, 2011)]
[Rules and Regulations]
[Pages 10516-10522]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2011-4061]
=======================================================================
-----------------------------------------------------------------------
DEPARTMENT OF THE TREASURY
Financial Crimes Enforcement Network
31 CFR Parts 1020, 1021, 1022, 1023, 1024, 1025, 1026, 1027, and
1028
RIN 1506-AA92
Transfer and Reorganization of Bank Secrecy Act Regulations--
Technical Amendment.
AGENCY: Financial Crimes Enforcement Network (FinCEN), Treasury.
ACTION: Final rule.
-----------------------------------------------------------------------
SUMMARY: FinCEN is issuing this final rule as a technical amendment to
new Chapter X of Title 31 of the Code of Federal Regulations, which was
published on October 26, 2010. After that date, FinCEN published two
final rules in Part 103 of Title 31 of the Code of Federal Regulations,
one concerning mutual funds and the other concerning the
confidentiality of a report of suspicious activity (SAR). This final
rule moves the SAR confidentiality rule from Part 103 to new Chapter X
and addresses the compliance date of the mutual fund rule.
Additionally, the Chapter X Final Rule contained an inadvertent
typographical error that omitted several sections from Subpart C of
Part 1026 Rules for Futures Commission Merchants and Introducing
Brokers in Commodities. This final rule corrects those omissions.
DATES: Effective Date: March 1, 2011.
FOR FURTHER INFORMATION CONTACT: Regulatory Policy and Programs
Division, FinCEN (800) 949-2732 and select option 6.
SUPPLEMENTARY INFORMATION:
I. Background
On October 26, 2010, FinCEN issued a final rule (``the Chapter X
Final Rule''), creating a new Chapter X in title 31 of the Code of
Federal Regulations (CFR) for Bank Secrecy Act (BSA) regulations. As
discussed in the Chapter X Final Rule, FinCEN is reorganizing its
regulations in new Chapter X to make them more accessible for covered
individuals and financial institutions. The reorganization is not
intended to have any substantive effect on the BSA regulations. Chapter
X will be effective on March 1, 2011.\1\
---------------------------------------------------------------------------
\1\ See 75 FR 65806 (October 26, 2010) (Transfer and
Reorganization of Bank Secrecy Act Regulations Final Rule).
---------------------------------------------------------------------------
On April 14, 2010, FinCEN issued a final rule to include mutual
funds within the general definition of ``financial institution'' in the
BSA regulations.\2\ On October 15, 2010, FinCEN published a final rule
extending the compliance date for those provisions of 31 CFR 103.33
that apply to mutual funds from January 10, 2011 to April 10, 2011;
however, this extension of the compliance date has not otherwise
amended the applicable regulation.\3\ The regulatory changes made by
including mutual funds within the general definition of ``financial
institution'' were contained in the Chapter X Final Rule. The extended
compliance date for these provisions still applies even though they
have moved to 31 CFR Chapter X.
---------------------------------------------------------------------------
\2\ See 75 FR 19241 (April 14, 2010) (Final Rule defining
Mutual Funds as Financial Institutions).
\3\ See 75 FR 63382.
---------------------------------------------------------------------------
On December 3, 2010, FinCEN issued a final rule to amend the BSA
regulations regarding the confidentiality of a report of suspicious
activity (``SAR''). To reflect the reorganization of BSA rules in
Chapter X, FinCEN is issuing this technical amendment rule to move the
revised SAR confidentiality rules, without any change to their
applicability date, to Chapter X.
As published, the Chapter X Final Rule contains omissions from
Subpart C of Part 1026 Rules for Futures Commission Merchants and
Introducing Brokers in Commodities. This final rule corrects those
omissions.
II. Effective Date
The effective date of this technical amendment to Chapter X will be
March 1, 2011. As noted above, this technical amendment does not affect
any of the applicability dates of the rules that are being moved to
Chapter X by this technical amendment.
III. Regulatory Matters
A. Executive Order 12866
It has been determined that this rulemaking is not a significant
regulatory action for purposes of Executive Order 12866. Accordingly, a
regulatory impact analysis is not required.
B. Unfunded Mandates Reform Act of 1995
Section 202 of the Unfunded Mandates Reform Act of 1995 (``Unfunded
Mandates Act''), Public Law 104-4 (March 22, 1995), requires that an
agency prepare a budgetary impact statement before promulgating a rule
that may result in expenditure by state, local, and tribal governments,
in the aggregate, or by the private sector, of $100 million or more in
any one year. If a budgetary impact statement is required, section 202
of the Unfunded Mandates Act also requires an agency to identify and
consider a reasonable number of regulatory alternatives before
promulgating a rule. FinCEN has determined that it is not required to
prepare a written statement under Section 202 and has concluded that on
balance the rule provides the most cost-effective and least burdensome
alternative to achieve the objectives of the rule.
C. Regulatory Flexibility Act
Pursuant to the Regulatory Flexibility Act (RFA) (5 U.S.C. 602 et
seq.), FinCEN certifies that this final regulation likely will not have
a significant economic impact on a substantial number of small
entities. The regulatory changes in this final rule merely restructure
and re-codify existing regulations and do not alter current regulatory
obligations.
D. Paperwork Reduction Act
This regulation contains no new information collection requirements
subject to review and approval by the Office of Management and Budget
under the Paperwork Reduction Act of 1995 (44 U.S.C. 3507(d) et seq.).
The information collection requirements for the Bank Secrecy Act,
currently codified at 31 CFR Part 103, were previously approved by the
Office of Management and Budget under OMB Control numbers 1506-0001
through 1506-0046. Under the Paperwork Reduction Act, an agency may not
conduct or sponsor and a person is not required to respond to a
collection of information unless it displays a valid OMB control
number.
List of Subjects in 31 CFR Parts 1020, 1021, 1022, 1023, 1024,
1025, 1026, 1027, and 1028
Administrative practice and procedure, Banks, Banking, Brokers,
Currency, Foreign banking, Foreign currencies, Gambling,
Investigations, Penalties, Reporting and recordkeeping requirements,
Securities, Terrorism.
Authority and Issuance
For the reasons set forth above, 31 CFR Chapter X, published
October 26, 2010 (75 FR 65842), is amended as follows:
PART 1020--RULE FOR BANKS
0
1. The authority citation for part 1020 is added to read as follows:
[[Page 10517]]
Authority: 12 U.S.C. 1829b and 1951-1959; 31 U.S.C. 5311-5314
and 5316-5332; title III, sec. 314, Pub. L. 107-56, 115 Stat. 307.
0
2. Section 1020.320 is amended by:
0
a. Revising the last sentence of paragraph (d); and
0
b. Revising paragraphs (e) and (f); and
0
c. Adding new paragraph (g), to read as follows:
Sec. 1020.320 Reports by banks of suspicious transactions.
* * * * *
(d) * * * A bank shall make all supporting documentation available
to FinCEN or any Federal, State, or local law enforcement agency, or
any Federal regulatory authority that examines the bank for compliance
with the Bank Secrecy Act, or any State regulatory authority
administering a State law that requires the bank to comply with the
Bank Secrecy Act or otherwise authorizes the State authority to ensure
that the institution complies with the Bank Secrecy Act, upon request.
(e) Confidentiality of SARs. A SAR, and any information that would
reveal the existence of a SAR, are confidential and shall not be
disclosed except as authorized in this paragraph (e). For purposes of
this paragraph (e) only, a SAR shall include any suspicious activity
report filed with FinCEN pursuant to any regulation in this chapter.
(1) Prohibition on disclosures by banks--(i) General rule. No bank,
and no director, officer, employee, or agent of any bank, shall
disclose a SAR or any information that would reveal the existence of a
SAR. Any bank, and any director, officer, employee, or agent of any
bank that is subpoenaed or otherwise requested to disclose a SAR or any
information that would reveal the existence of a SAR, shall decline to
produce the SAR or such information, citing this section and 31 U.S.C.
5318(g)(2)(A)(i), and shall notify FinCEN of any such request and the
response thereto.
(ii) Rules of Construction. Provided that no person involved in any
reported suspicious transaction is notified that the transaction has
been reported, this paragraph (e)(1) shall not be construed as
prohibiting:
(A) The disclosure by a bank, or any director, officer, employee,
or agent of a bank, of:
(1) A SAR, or any information that would reveal the existence of a
SAR, to FinCEN or any Federal, State, or local law enforcement agency,
or any Federal regulatory authority that examines the bank for
compliance with the Bank Secrecy Act, or any State regulatory authority
administering a State law that requires the bank to comply with the
Bank Secrecy Act or otherwise authorizes the State authority to ensure
that the bank complies with the Bank Secrecy Act; or
(2) The underlying facts, transactions, and documents upon which a
SAR is based, including but not limited to, disclosures:
(i) To another financial institution, or any director, officer,
employee, or agent of a financial institution, for the preparation of a
joint SAR; or
(ii) In connection with certain employment references or
termination notices, to the full extent authorized in 31 U.S.C.
5318(g)(2)(B); or
(B) The sharing by a bank, or any director, officer, employee, or
agent of the bank, of a SAR, or any information that would reveal the
existence of a SAR, within the bank's corporate organizational
structure for purposes consistent with Title II of the Bank Secrecy Act
as determined by regulation or in guidance.
(2) Prohibition on disclosures by government authorities. A
Federal, State, local, territorial, or Tribal government authority, or
any director, officer, employee, or agent of any of the foregoing,
shall not disclose a SAR, or any information that would reveal the
existence of a SAR, except as necessary to fulfill official duties
consistent with Title II of the Bank Secrecy Act. For purposes of this
section, ``official duties'' shall not include the disclosure of a SAR,
or any information that would reveal the existence of a SAR, in
response to a request for disclosure of non-public information or a
request for use in a private legal proceeding, including a request
pursuant to 31 CFR 1.11.
(f) Limitation on liability. A bank, and any director, officer,
employee, or agent of any bank, that makes a voluntary disclosure of
any possible violation of law or regulation to a government agency or
makes a disclosure pursuant to this section or any other authority,
including a disclosure made jointly with another institution, shall be
protected from liability to any person for any such disclosure, or for
failure to provide notice of such disclosure to any person identified
in the disclosure, or both, to the full extent provided by 31 U.S.C.
5318(g)(3).
(g) Compliance. Banks shall be examined by FinCEN or its delegatees
for compliance with this section. Failure to satisfy the requirements
of this section may be a violation of the Bank Secrecy Act and of this
chapter. Such failure may also violate provisions of Title 12 of the
Code of Federal Regulations.
PART 1021--RULES FOR CASINOS AND CARD CLUBS
0
3. The authority citation for part 1021 is added to read as follows:
Authority: 12 U.S.C. 1829b and 1951-1959; 31 U.S.C. 5311-5314
and 5316-5332; title III, sec. 314, Pub. L. 107-56, 115 Stat. 307.
0
4. Section 1021.320 is amended by:
0
a. Revising the last sentence of paragraph (d)
0
b. Revising paragraph (e);
0
c. Redesignating paragraphs (f) and (g) as paragraphs (g) and (h);
0
d. Adding new paragraph (f); and
0
e. Revising newly designated paragraph (g).
Sec. 1021.320 Reports by casinos of suspicious transactions.
* * * * *
(d) * * * A casino shall make all supporting documentation
available to FinCEN or any Federal, State, or local law enforcement
agency, or any Federal regulatory authority that examines the casino
for compliance with the Bank Secrecy Act, or any State regulatory
authority administering a State law that requires the casino to comply
with the Bank Secrecy Act or otherwise authorizes the State authority
to ensure that the casino complies with the Bank Secrecy Act, or any
tribal regulatory authority administering a tribal law that requires
the casino to comply with the Bank Secrecy Act or otherwise authorizes
the tribal regulatory authority to ensure that the casino complies with
the Bank Secrecy Act, upon request.
(e) Confidentiality of SARs. A SAR, and any information that would
reveal the existence of a SAR, are confidential and shall not be
disclosed except as authorized in this paragraph (e). For purposes of
this paragraph (e) only, a SAR shall include any suspicious activity
report filed with FinCEN pursuant to any regulation in this chapter.
(1) Prohibition on disclosures by casinos--(i) General rule. No
casino, and no director, officer, employee, or agent of any casino,
shall disclose a SAR or any information that would reveal the existence
of a SAR. Any casino, and any director, officer, employee, or agent of
any casino that is subpoenaed or otherwise requested to disclose a SAR
or any information that would reveal the existence of a SAR, shall
decline to produce the SAR or such information, citing this section and
31 U.S.C. 5318(g)(2)(A)(i), and shall notify FinCEN of any such request
and the response thereto.
(ii) Rules of Construction. Provided that no person involved in any
reported
[[Page 10518]]
suspicious transaction is notified that the transaction has been
reported, this paragraph (e)(1) shall not be construed as prohibiting:
(A) The disclosure by a casino, or any director, officer, employee,
or agent of a casino, of:
(1) A SAR, or any information that would reveal the existence of a
SAR, to FinCEN or any Federal, State, or local law enforcement agency,
or any Federal regulatory authority that examines the casino for
compliance with the Bank Secrecy Act, or any State regulatory authority
administering a State law that requires the casino to comply with the
Bank Secrecy Act or otherwise authorizes the State authority to ensure
that the casino complies with the Bank Secrecy Act, or any tribal
regulatory authority administering a tribal law that requires the
casino to comply with the Bank Secrecy Act or otherwise authorizes the
tribal regulatory authority to ensure that casino complies with the
Bank Secrecy Act; or
(2) The underlying facts, transactions, and documents upon which a
SAR is based, including but not limited to, disclosures to another
financial institution, or any director, officer, employee, or agent of
a financial institution, for the preparation of a joint SAR.
(B) The sharing by a casino, or any director, officer, employee, or
agent of the casino, of a SAR, or any information that would reveal the
existence of a SAR, within the casino's corporate organizational
structure for purposes consistent with Title II of the Bank Secrecy Act
as determined by regulation or in guidance.
(2) Prohibition on disclosures by government authorities. A
Federal, State, local, territorial, or Tribal government authority, or
any director, officer, employee, or agent of any of the foregoing,
shall not disclose a SAR, or any information that would reveal the
existence of a SAR, except as necessary to fulfill official duties
consistent with Title II of the Bank Secrecy Act (BSA). For purposes of
this section, ``official duties'' shall not include the disclosure of a
SAR, or any information that would reveal the existence of a SAR, in
response to a request for disclosure of non-public information or a
request for use in a private legal proceeding, including a request
pursuant to 31 CFR 1.11.
(f) Limitation on liability. A casino, and any director, officer,
employee, or agent of any casino, that makes a voluntary disclosure of
any possible violation of law or regulation to a government agency or
makes a disclosure pursuant to this section or any other authority,
including a disclosure made jointly with another institution, shall be
protected from liability to any person for any such disclosure, or for
failure to provide notice of such disclosure to any person identified
in the disclosure, or both, to the full extent provided by 31 U.S.C.
5318(g)(3).
(g) Compliance. Casinos shall be examined by FinCEN or its
delegatees for compliance with this section. Failure to satisfy the
requirements of this section may be a violation of the Bank Secrecy Act
and of this chapter.
* * * * *
PART 1022--RULES FOR MONEY SERVICES BUSINESSES
0
5. The authority citation for part 1022 is added to read as follows:
Authority: 12 U.S.C. 1829b and 1951-1959; 31 U.S.C. 5311-5314
and 5316-5332; title III, sec. 314, Pub. L. 107-56, 115 Stat. 307.
0
6. Section 1022.320 is amended by:
0
a. Revising the last sentence of paragraph (c);
0
b. Revising paragraph (d);
0
c. Redesignating paragraphs (e) and (f) as paragraphs (f) and (g);
0
d. Adding new paragraph (e); and
0
e. Revising newly designated paragraph (f), to read as follows:
Sec. 1022.320 Reports by money services businesses of suspicious
transactions.
* * * * *
(c) * * * A money services business shall make all supporting
documentation available to FinCEN or any Federal, State, or local law
enforcement agency, or any Federal regulatory authority that examines
the money services business for compliance with the Bank Secrecy Act,
or any State regulatory authority administering a State law that
requires the money services business to comply with the Bank Secrecy
Act or otherwise authorizes the State authority to ensure that the
money services business complies with the Bank Secrecy Act.
(d) Confidentiality of SARs. A SAR, and any information that would
reveal the existence of a SAR, are confidential and shall not be
disclosed except as authorized in this paragraph (d). For purposes of
this paragraph (d) only, a SAR shall include any suspicious activity
report filed with FinCEN pursuant to any regulation in this chapter.
(1) Prohibition on disclosures by money services businesses--(i)
General rule. No money services business, and no director, officer,
employee, or agent of any money services business, shall disclose a SAR
or any information that would reveal the existence of a SAR. Any money
services business, and any director, officer, employee, or agent of any
money services business that is subpoenaed or otherwise requested to
disclose a SAR or any information that would reveal the existence of a
SAR, shall decline to produce the SAR or such information, citing this
section and 31 U.S.C. 5318(g)(2)(A)(i), and shall notify FinCEN of any
such request and the response thereto.
(ii) Rules of Construction. Provided that no person involved in any
reported suspicious transaction is notified that the transaction has
been reported, this paragraph (d)(1) shall not be construed as
prohibiting:
(A) The disclosure by a money services business, or any director,
officer, employee, or agent of a money services business, of:
(1) A SAR, or any information that would reveal the existence of a
SAR, to FinCEN or any Federal, State, or local law enforcement agency,
or any Federal regulatory authority that examines the money services
business for compliance with the Bank Secrecy Act, or any State
regulatory authority administering a State law that requires the money
services business to comply with the Bank Secrecy Act or otherwise
authorizes the State authority to ensure that the money services
business complies with the Bank Secrecy Act; or
(2) The underlying facts, transactions, and documents upon which a
SAR is based, including but not limited to, disclosures to another
financial institution, or any director, officer, employee, or agent of
a financial institution, for the preparation of a joint SAR.
(B) The sharing by a money services business, or any director,
officer, employee, or agent of the money services business, of a SAR,
or any information that would reveal the existence of a SAR, within the
money services business's corporate organizational structure for
purposes consistent with Title II of the Bank Secrecy Act as determined
by regulation or in guidance.
(2) Prohibition on disclosures by government authorities. A
Federal, State, local, territorial, or Tribal government authority, or
any director, officer, employee, or agent of any of the foregoing,
shall not disclose a SAR, or any information that would reveal the
existence of a SAR, except as necessary to fulfill official duties
consistent with Title II of the Bank Secrecy Act. For purposes of this
section, ``official duties'' shall not include the disclosure of a SAR,
or any information that would
[[Page 10519]]
reveal the existence of a SAR, in response to a request for disclosure
of non-public information or a request for use in a private legal
proceeding, including a request pursuant to 31 CFR 1.11.
(e) Limitation on liability. A money services business, and any
director, officer, employee, or agent of any money services business,
that makes a voluntary disclosure of any possible violation of law or
regulation to a government agency or makes a disclosure pursuant to
this section or any other authority, including a disclosure made
jointly with another institution, shall be protected from liability to
any person for any such disclosure, or for failure to provide notice of
such disclosure to any person identified in the disclosure, or both, to
the full extent provided by 31 U.S.C. 5318(g)(3).
(f) Compliance. Money services businesses shall be examined by
FinCEN or its delegatees for compliance with this section. Failure to
satisfy the requirements of this section may be a violation of the Bank
Secrecy Act and of this chapter.
* * * * *
PART 1023--RULES FOR BROKERS OR DEALERS IN SECURITIES
0
7. The authority citation for part 1023 is added to read as follows:
Authority: 12 U.S.C. 1829b and 1951-1959; 31 U.S.C. 5311-5314
and 5316-5332; title III, sec. 314, Pub. L. 107-56, 115 Stat. 307.
0
8. Section 1023.320 is amended by revising the last sentence in
paragraph (d), and by revising paragraphs (e), (f), and (g) to read as
follows:
Sec. 1023.320 Reports by brokers or dealers in securities of
suspicious transactions.
* * * * *
(d) * * * A broker-dealer shall make all supporting documentation
available to FinCEN or any Federal, State, or local law enforcement
agency, or any Federal regulatory authority that examines the broker-
dealer for compliance with the Bank Secrecy Act, upon request; or to
any SRO that examines the broker-dealer for compliance with the
requirements of this section, upon the request of the Securities and
Exchange Commission.
(e) Confidentiality of SARs. A SAR, and any information that would
reveal the existence of a SAR, are confidential and shall not be
disclosed except as authorized in this paragraph (e). For purposes of
this paragraph (e) only, a SAR shall include any suspicious activity
report filed with FinCEN pursuant to any regulation in this chapter.
(1) Prohibition on disclosures by brokers or dealers in securities.
(i) General rule. No broker-dealer, and no director, officer, employee,
or agent of any broker-dealer, shall disclose a SAR or any information
that would reveal the existence of a SAR. Any broker-dealer, and any
director, officer, employee, or agent of any broker-dealer that is
subpoenaed or otherwise requested to disclose a SAR or any information
that would reveal the existence of a SAR, shall decline to produce the
SAR or such information, citing this section and 31 U.S.C.
5318(g)(2)(A)(i), and shall notify FinCEN of any such request and the
response thereto.
(ii) Rules of Construction. Provided that no person involved in any
reported suspicious transaction is notified that the transaction has
been reported, this paragraph (e)(1) shall not be construed as
prohibiting:
(A) The disclosure by a broker-dealer, or any director, officer,
employee, or agent of a broker-dealer, of:
(1) A SAR, or any information that would reveal the existence of a
SAR, to FinCEN or any Federal, State, or local law enforcement agency,
or any Federal regulatory authority that examines the broker-dealer for
compliance with the Bank Secrecy Act; or to any SRO that examines the
broker-dealer for compliance with the requirements of this section,
upon the request of the Securities Exchange Commission; or
(2) The underlying facts, transactions, and documents upon which a
SAR is based, including but not limited to, disclosures:
(i) To another financial institution, or any director, officer,
employee, or agent of a financial institution, for the preparation of a
joint SAR; or
(ii) In connection with certain employment references or
termination notices, to the full extent authorized in 31 U.S.C.
5318(g)(2)(B); or
(B) The sharing by a broker-dealer, or any director, officer,
employee, or agent of the broker-dealer, of a SAR, or any information
that would reveal the existence of a SAR, within the broker-dealer's
corporate organizational structure for purposes consistent with Title
II of the Bank Secrecy Act as determined by regulation or in guidance.
(2) Prohibition on disclosures by government authorities. A
Federal, State, local, territorial, or Tribal government authority, or
any director, officer, employee, or agent of any of the foregoing,
shall not disclose a SAR, or any information that would reveal the
existence of a SAR, except as necessary to fulfill official duties
consistent with Title II of the Bank Secrecy Act. For purposes of this
section, ``official duties'' shall not include the disclosure of a SAR,
or any information that would reveal the existence of a SAR, in
response to a request for disclosure of non-public information or a
request for use in a private legal proceeding, including a request
pursuant to 31 CFR 1.11.
(3) Prohibition on disclosures by Self-Regulatory Organizations.
Any self-regulatory organization registered with the Securities and
Exchange Commission, or any director, officer, employee, or agent of
any of the foregoing, shall not disclose a SAR, or any information that
would reveal the existence of a SAR except as necessary to fulfill
self-regulatory duties with the consent of the Securities Exchange
Commission, in a manner consistent with Title II of the Bank Secrecy
Act. For purposes of this section, ``self-regulatory duties'' shall not
include the disclosure of a SAR, or any information that would reveal
the existence of a SAR, in response to a request for disclosure of non-
public information or a request for use in a private legal proceeding.
(f) Limitation on liability. A broker-dealer, and any director,
officer, employee, or agent of any broker-dealer, that makes a
voluntary disclosure of any possible violation of law or regulation to
a government agency or makes a disclosure pursuant to this section or
any other authority, including a disclosure made jointly with another
institution, shall be protected from liability to any person for any
such disclosure, or for failure to provide notice of such disclosure to
any person identified in the disclosure, or both, to the full extent
provided by 31 U.S.C. 5318(g)(3).
(g) Compliance. Broker-dealers shall be examined by FinCEN or its
delegatees for compliance with this section. Failure to satisfy the
requirements of this section may be a violation of the Bank Secrecy Act
and of this chapter.
* * * * *
PART 1024--RULES FOR MUTUAL FUNDS
0
9. The authority citation for part 1024 is added to read as follows:
Authority: 12 U.S.C. 1829b and 1951-1959; 31 U.S.C. 5311-5314
and 5316-5332; title III, sec. 314, Pub. L. 107-56, 115 Stat. 307.
0
10. Section 1024.320 is amended by:
[[Page 10520]]
0
a. Revising the last sentence of paragraph (c); and
0
b. Revising paragraphs (d), (e), and (f), to read as follows:
Sec. 1024.320 Reports by mutual funds of suspicious transactions.
* * * * *
(c) * * * The mutual fund shall make all supporting documentation
available to FinCEN or any Federal, State, or local law enforcement
agency, or any Federal regulatory authority that examines the mutual
fund for compliance with the Bank Secrecy Act, upon request.
(d) Confidentiality of SARs. A SAR, and any information that would
reveal the existence of a SAR, are confidential and shall not be
disclosed except as authorized in this paragraph (d). For purposes of
this paragraph (d) only, a SAR shall include any suspicious activity
report filed with FinCEN pursuant to any regulation in this chapter.
(1) Prohibition on disclosures by mutual funds--(i) General rule.
No mutual fund, and no director, officer, employee, or agent of any
mutual fund, shall disclose a SAR or any information that would reveal
the existence of a SAR. Any mutual fund, and any director, officer,
employee, or agent of any mutual fund that is subpoenaed or otherwise
requested to disclose a SAR or any information that would reveal the
existence of a SAR, shall decline to produce the SAR or such
information, citing this section and 31 U.S.C. 5318(g)(2)(A)(i), and
shall notify FinCEN of any such request and the response thereto.
(ii) Rules of construction. Provided that no person involved in any
reported suspicious transaction is notified that the transaction has
been reported, this paragraph (d)(1) shall not be construed as
prohibiting:
(A) The disclosure by a mutual fund, or any director, officer,
employee, or agent of a mutual fund, of:
(1) A SAR, or any information that would reveal the existence of a
SAR, to FinCEN or any Federal, State, or local law enforcement agency,
or any Federal regulatory authority that examines the mutual fund for
compliance with the Bank Secrecy Act; or
(2) The underlying facts, transactions, and documents upon which a
SAR is based, including but not limited to, disclosures to another
financial institution, or any director, officer, employee, or agent of
a financial institution, for the preparation of a joint SAR; or
(B) The sharing by a mutual fund, or any director, officer,
employee, or agent of the mutual fund, of a SAR, or any information
that would reveal the existence of a SAR, within the mutual fund's
corporate organizational structure for purposes consistent with Title
II of the Bank Secrecy Act as determined by regulation or in guidance.
(2) Prohibition on disclosures by government authorities. A
Federal, State, local, territorial, or Tribal government authority, or
any director, officer, employee, or agent of any of the foregoing,
shall not disclose a SAR, or any information that would reveal the
existence of a SAR, except as necessary to fulfill official duties
consistent with Title II of the Bank Secrecy Act. For purposes of this
section, ``official duties'' shall not include the disclosure of a SAR,
or any information that would reveal the existence of a SAR, in
response to a request for disclosure of non-public information or a
request for use in a private legal proceeding, including a request
pursuant to 31 CFR 1.11.
(e) Limitation on liability. A mutual fund, and any director,
officer, employee, or agent of any mutual fund, that makes a voluntary
disclosure of any possible violation of law or regulation to a
government agency or makes a disclosure pursuant to this section or any
other authority, including a disclosure made jointly with another
institution, shall be protected from liability to any person for any
such disclosure, or for failure to provide notice of such disclosure to
any person identified in the disclosure, or both, to the full extent
provided by 31 U.S.C. 5318(g)(3).
(f) Compliance. Mutual funds shall be examined by FinCEN or its
delegatees for compliance with this section. Failure to satisfy the
requirements of this section may be a violation of the Bank Secrecy Act
and of this chapter.
* * * * *
PART 1025--RULES FOR INSURANCE COMPANIES
0
11. The authority citation for part 1025 is added to read as follows:
Authority: 12 U.S.C. 1829b and 1951-1959; 31 U.S.C. 5311-5314
and 5316-5332; title III, sec. 314, Pub. L. 107-56, 115 Stat. 307.
0
12. Section 1025.320 is amended by:
0
a. Revising the last sentence of paragraph (d);
0
b. Revising paragraph (e);
0
c. Redesignating paragraphs (f) through (h) as paragraphs (g) through
(i);
0
d. Adding new paragraph (f); and
0
e. Revising newly designated paragraph (g), to read as follows:
Sec. 1025.320 Reports by insurance companies of suspicious
transactions.
* * * * *
(d) * * * An insurance company shall make all supporting
documentation available to FinCEN or any Federal, State, or local law
enforcement agency, or any Federal regulatory authority that examines
the insurance company for compliance with the Bank Secrecy Act, or any
State regulatory authority administering a State law that requires the
insurance company to comply with the Bank Secrecy Act or otherwise
authorizes the State authority to ensure that the institution complies
with the Bank Secrecy Act, upon request.
(e) Confidentiality of SARs. A SAR, and any information that would
reveal the existence of a SAR, are confidential and shall not be
disclosed except as authorized in this paragraph (e). For purposes of
this paragraph (e) only, a SAR shall include any suspicious activity
report filed with FinCEN pursuant to any regulation in this chapter.
(1) Prohibition on disclosures by insurance companies--(i) General
rule. No insurance company, and no director, officer, employee, or
agent of any insurance company, shall disclose a SAR or any information
that would reveal the existence of a SAR. Any insurance company, and
any director, officer, employee, or agent of any insurance company that
is subpoenaed or otherwise requested to disclose a SAR or any
information that would reveal the existence of a SAR, shall decline to
produce the SAR or such information, citing this section and 31 U.S.C.
5318(g)(2)(A)(i), and shall notify FinCEN of any such request and the
response thereto.
(ii) Rules of Construction. Provided that no person involved in any
reported suspicious transaction is notified that the transaction has
been reported, this paragraph (e)(1) shall not be construed as
prohibiting:
(A) The disclosure by an insurance company, or any director,
officer, employee, or agent of an insurance company, of:
(1) A SAR, or any information that would reveal the existence of a
SAR, to FinCEN or any Federal, State, or local law enforcement agency,
or any Federal regulatory authority that examines the insurance company
for compliance with the Bank Secrecy Act, or any State regulatory
authority administering a State law that requires the insurance company
to comply with the Bank Secrecy Act or otherwise authorizes the State
authority to ensure that the
[[Page 10521]]
institution complies with the Bank Secrecy Act; or
(2) The underlying facts, transactions, and documents upon which a
SAR is based, including but not limited to, disclosures to another
financial institution, or any director, officer, employee, or agent of
a financial institution, for the preparation of a joint SAR.
(B) The sharing by an insurance company, or any director, officer,
employee, or agent of the insurance company, of a SAR, or any
information that would reveal the existence of a SAR, within the
insurance company's corporate organizational structure for purposes
consistent with Title II of the Bank Secrecy Act as determined by
regulation or in guidance.
(2) Prohibition on disclosures by government authorities. A
Federal, State, local, territorial, or Tribal government authority, or
any director, officer, employee, or agent of any of the foregoing,
shall not disclose a SAR, or any information that would reveal the
existence of a SAR, except as necessary to fulfill official duties
consistent with Title II of the Bank Secrecy Act. For purposes of this
section, ``official duties'' shall not include the disclosure of a SAR,
or any information that would reveal the existence of a SAR, in
response to a request for disclosure of non-public information or a
request for use in a private legal proceeding, including a request
pursuant to 31 CFR 1.11.
(f) Limitation on liability. An insurance company, and any
director, officer, employee, or agent of any insurance company, that
makes a voluntary disclosure of any possible violation of law or
regulation to a government agency or makes a disclosure pursuant to
this section or any other authority, including a disclosure made
jointly with another institution, shall be protected from liability to
any person for any such disclosure, or for failure to provide notice of
such disclosure to any person identified in the disclosure, or both, to
the full extent provided by 31 U.S.C. 5318(g)(3).
(g) Compliance. Insurance companies shall be examined by FinCEN or
its delegatees for compliance with this section. Failure to satisfy the
requirements of this section may be a violation of the Bank Secrecy Act
and of this chapter.
* * * * *
PART 1026--RULES FOR FUTURES COMMISSION MERCHANTS AND INTRODUCING
BROKERS IN COMMODITIES
0
13. The authority citation for part 1026 is added to read as follows:
Authority: 12 U.S.C. 1829b and 1951-1959; 31 U.S.C. 5311-5314
and 5316-5332; title III, sec. 314, Pub. L. 107-56, 115 Stat. 307.
0
14. Sections 1026.311, 1026.312, 1026.313 and 1026.314 are added to
Subpart C to read as follows:
Sec. 1026.311 Filing obligations.
Refer to Sec. 1010.311 of this Chapter for reports of transactions
in currency filing obligations for futures commission merchants and
introducing brokers in commodities.
Sec. 1026.312 Identification required.
Refer to Sec. 1010.312 of this Chapter for identification
requirements for reports of transactions in currency filed by futures
commission merchants and introducing brokers in commodities.
Sec. 1026.313 Aggregation.
Refer to Sec. 1010.313 of this Chapter for reports of transactions
in currency aggregation requirements for futures commission merchants
and introducing brokers in commodities.
Sec. 1026.314 Structured transactions.
Refer to Sec. 1010.314 of this Chapter for rules regarding
structured transactions for futures commission merchants and
introducing brokers in commodities.
0
15. Section 1026.320 is amended by revising the last sentence in
paragraph (d), and by revising paragraphs (e), (f), and (g) to read as
follows:
Sec. 1026.320 Reports by futures commission merchants and introducing
brokers in commodities of suspicious transactions.
* * * * *
(d) * * * An FCM or IB-C shall make all supporting documentation
available to FinCEN or any Federal, State, or local law enforcement
agency, or any Federal regulatory authority that examines the FCM or
IB-C for compliance with the BSA, upon request; or to any registered
futures association or registered entity (as defined in the Commodity
Exchange Act, 7 U.S.C. 21 and 7 U.S.C. 1(a)(29)) (collectively, a self-
regulatory organization (``SRO'')) that examines the FCM or IB-C for
compliance with the requirements of this section, upon the request of
the Commodity Futures Trading Commission.
(e) Confidentiality of SARs. A SAR, and any information that would
reveal the existence of a SAR, are confidential and shall not be
disclosed except as authorized in this paragraph (e). For purposes of
this paragraph (e) only, a SAR shall include any suspicious activity
report filed with FinCEN pursuant to any regulation in this chapter.
(1) Prohibition on disclosures by futures commission merchants and
introducing brokers in commodities--(i) General rule. No FCM or IB-C,
and no director, officer, employee, or agent of any FCM or IB-C, shall
disclose a SAR or any information that would reveal the existence of a
SAR. Any FCM or IB-C, and any director, officer, employee, or agent of
any FCM or IB-C that is subpoenaed or otherwise requested to disclose a
SAR or any information that would reveal the existence of a SAR, shall
decline to produce the SAR or such information, citing this section and
31 U.S.C. 5318(g)(2)(A)(i), and shall notify FinCEN of any such request
and the response thereto.
(ii) Rules of Construction. Provided that no person involved in any
reported suspicious transaction is notified that the transaction has
been reported, this paragraph (e)(1) shall not be construed as
prohibiting:
(A) The disclosure by an FCM or IB-C, or any director, officer,
employee, or agent of an FCM or IB-C, of:
(1) A SAR, or any information that would reveal the existence of a
SAR, to FinCEN or any Federal, State, or local law enforcement agency,
or any Federal regulatory authority that examines the FCM or IB-C for
compliance with the BSA; or to any SRO that examines the FCM or IB-C
for compliance with the requirements of this section, upon the request
of the Commodity Futures Trading Commission; or
(2) The underlying facts, transactions, and documents upon which a
SAR is based, including but not limited to, disclosures:
(i) To another financial institution, or any director, officer,
employee, or agent of a financial institution, for the preparation of a
joint SAR; or
(ii) In connection with certain employment references or
termination notices, to the full extent authorized in 31 U.S.C.
5318(g)(2)(B); or
(B) The sharing by an FCM or IB-C, or any director, officer,
employee, or agent of the FCM or IB-C, of a SAR, or any information
that would reveal the existence of a SAR, within the FCM's or IB-C's
corporate organizational structure for purposes consistent with Title
II of the BSA as determined by regulation or in guidance.
(2) Prohibition on disclosures by government authorities. A
Federal, State, local, territorial, or Tribal government authority, or
any director,
[[Page 10522]]
officer, employee, or agent of any of the foregoing, shall not disclose
a SAR, or any information that would reveal the existence of a SAR,
except as necessary to fulfill official duties consistent with Title II
of the BSA. For purposes of this section, ``official duties'' shall not
include the disclosure of a SAR, or any information that would reveal
the existence of a SAR, in response to a request for disclosure of non-
public information or a request for use in a private legal proceeding,
including a request pursuant to 31 CFR 1.11.
(3) Prohibition on disclosures by Self-Regulatory Organizations.
Any self-regulatory organization registered with or designated by the
Commodity Futures Trading Commission, or any director, officer,
employee, or agent of any of the foregoing, shall not disclose a SAR,
or any information that would reveal the existence of a SAR except as
necessary to fulfill self-regulatory duties upon the request of the
Commodity Futures Trading Commission, in a manner consistent with Title
II of the BSA. For purposes of this section, ``self-regulatory duties''
shall not include the disclosure of a SAR, or any information that
would reveal the existence of a SAR, in response to a request for
disclosure of non-public information or a request for use in a private
legal proceeding.
(f) Limitation on liability. An FCM or IB-C, and any director,
officer, employee, or agent of any FCM or IB-C, that makes a voluntary
disclosure of any possible violation of law or regulation to a
government agency or makes a disclosure pursuant to this section or any
other authority, including a disclosure made jointly with another
institution, shall be protected from liability to any person for any
such disclosure, or for failure to provide notice of such disclosure to
any person identified in the disclosure, or both, to the full extent
provided by 31 U.S.C. 5318(g)(3).
(g) Compliance. FCMs or IB-Cs shall be examined by FinCEN or its
delegatees for compliance with this section. Failure to satisfy the
requirements of this section may be a violation of the Bank Secrecy Act
and of this chapter.
* * * * *
PART 1027--RULES FOR DEALERS IN PRECIOUS METALS, PRECIOUS STONES,
OR JEWELS
0
16. The authority citation for part 1027 is added to read as follows:
Authority: 12 U.S.C. 1829b and 1951-1959; 31 U.S.C. 5311-5314
and 5316-5332; title III, sec. 314, Pub. L. 107-56, 115 Stat. 307.
PART 1028--RULES FOR OPERATORS OF CREDIT CARD SYSTEMS
0
17. The authority citation for part 1028 is added to read as follows:
Authority: 12 U.S.C. 1829b and 1951-1959; 31 U.S.C. 5311-5314
and 5316-5332; title III, sec. 314, Pub. L. 107-56, 115 Stat. 307.
Dated: February 16, 2011.
James H. Freis, Jr.,
Director, Financial Crimes Enforcement Network.
[FR Doc. 2011-4061 Filed 2-24-11; 8:45 am]
BILLING CODE 4810-02-P
