The New York State Department of Financial Services issued final rules that require banks and certain other financial institutions it regulates to maintain an ongoing transaction monitoring and filtering program that is “reasonably designed” to detect possible Bank Secrecy Act violations and other anti-money laundering violations, and to prevent transactions with sanctioned persons and entities (e.g., as identified by the Office of Financial Assets Control of the US Department of Treasury). Under the DFS’s final rules, the monitoring program may be manual or automated but must be based on a risk assessment of the institution and must be periodically updated to reflect changes in applicable laws and regulatory warnings. The program must, as applicable, identify all relevant data sources and validate “the integrity, accuracy and quality of data to ensure that accurate and complete data flows through the Transaction Monitoring and Filtering Program.” Each regulated entity is required to adopt and submit to the DFS by April 15 annually a board resolution or a senior officer’s compliance finding that the firm has a transaction monitoring and filtering program that complies with the DFS’s requirements. The new requirements are effective January 1, 2017, with the first annual board resolutions or compliance finding required to be submitted to the DFS by April 15, 2018.
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