Notice2024-18036
Agency Information Collection Activities; Proposed Renewal; Comment Request; Renewal Without Change of Regulations Requiring Additional Records To Be Made and Retained by Dealers in Foreign Exchange and Additional Records To Be Made and Retained by Brokers or Dealers in Securities
Primary source
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Published
August 13, 2024
Issuing agencies
Treasury DepartmentFinancial Crimes Enforcement Network
Abstract
As part of its continuing effort to reduce paperwork and respondent burden, FinCEN invites comments on the proposed renewal, without change, of existing information collection requirements found in Bank Secrecy Act regulations that require dealers in foreign exchange and broker-dealers in securities to retain originals or copies of specified account or transaction records, and that require dealers in foreign exchange to secure and maintain records of the taxpayer identification number of persons for whom a transaction account is opened or a line of credit is extended. This request for comments is made pursuant to the Paperwork Reduction Act of 1995.
Full Text
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<title>Federal Register, Volume 89 Issue 156 (Tuesday, August 13, 2024)</title>
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[Federal Register Volume 89, Number 156 (Tuesday, August 13, 2024)]
[Notices]
[Pages 65980-65984]
From the Federal Register Online via the Government Publishing Office [<a href="http://www.gpo.gov">www.gpo.gov</a>]
[FR Doc No: 2024-18036]
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DEPARTMENT OF THE TREASURY
Financial Crimes Enforcement Network
Agency Information Collection Activities; Proposed Renewal;
Comment Request; Renewal Without Change of Regulations Requiring
Additional Records To Be Made and Retained by Dealers in Foreign
Exchange and Additional Records To Be Made and Retained by Brokers or
Dealers in Securities
AGENCY: Financial Crimes Enforcement Network (FinCEN), Treasury.
ACTION: Notice and request for comments.
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SUMMARY: As part of its continuing effort to reduce paperwork and
respondent burden, FinCEN invites comments on the proposed renewal,
without change, of existing information collection requirements found
in Bank Secrecy Act regulations that require dealers in foreign
exchange and broker-dealers in securities to retain originals or copies
of specified account or transaction records, and that require dealers
in foreign exchange to secure and maintain records of the taxpayer
identification number of persons for whom a transaction account is
opened or a line of credit is extended. This request for comments is
made pursuant to the Paperwork Reduction Act of 1995.
DATES: Written comments are welcome and must be received on or before
October 15, 2024.
ADDRESSES: Comments may be submitted by any of the following methods:
<bullet> Federal E-rulemaking Portal: <a href="http://www.regulations.gov">http://www.regulations.gov</a>.
Follow the instructions for submitting comments. Refer to Docket Number
FINCEN-2024-0014 and Office of Management and
[[Page 65981]]
Budget (OMB) control numbers 1506-0052 and 1506-0053.
<bullet> Mail: Policy Division, Financial Crimes Enforcement
Network, P.O. Box 39, Vienna, VA 22183. Refer to Docket Number FINCEN-
2024-0014 and OMB control numbers 1506-0052 and 1506-0053.
Please submit comments by one method only. Comments will be
reviewed consistent with the Paperwork Reduction Act of 1995 and
applicable OMB regulations and guidance. All comments submitted in
response to this notice will become a matter of public record.
Therefore, you should submit only information that you wish to make
publicly available.
FOR FURTHER INFORMATION CONTACT: FinCEN's Regulatory Support Section at
1-800-767-2825 or electronically at <a href="/cdn-cgi/l/email-protection#482e3a2b082e21262b2d26662f273e"><span class="__cf_email__" data-cfemail="214753426147484f42444f0f464e57">[email protected]</span></a>.
SUPPLEMENTARY INFORMATION:
I. Statutory and Regulatory Provisions
The legislative framework generally referred to as the Bank Secrecy
Act (BSA) consists of the Currency and Foreign Transactions Reporting
Act of 1970, as amended by the Uniting and Strengthening America by
Providing Appropriate Tools Required to Intercept and Obstruct
Terrorism Act of 2001 (USA PATRIOT Act) \1\ and other legislation,
including the Anti-Money Laundering Act of 2020 (AML Act).\2\ The BSA
is codified at 12 U.S.C. 1829b, 1951-1960 and 31 U.S.C. 5311-5314,
5316-5336, including notes thereto, with implementing regulations at 31
CFR chapter X.
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\1\ USA PATRIOT Act, Public Law 107-56, 115 Stat. 272 (2001).
\2\ The AML Act was enacted as Division F, sections 6001-6511 of
the William M. (Mac) Thornberry National Defense Authorization Act
for Fiscal Year 2021, Public Law 116-283, 134 Stat. 3388.
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The BSA authorizes the Secretary of the Treasury (Secretary) to,
inter alia, require financial institutions to keep records and file
reports that are determined to have a high degree of usefulness in
criminal, tax, or regulatory matters, risk assessments or proceedings,
or in the conduct of intelligence or counter-intelligence activities to
protect against terrorism, and to implement anti-money laundering/
countering the financing of terrorism (AML/CFT) programs and compliance
procedures.\3\ The authority of the Secretary to administer the BSA has
been delegated to the Director of FinCEN.\4\
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\3\ See 31 U.S.C. 5311.
\4\ Treasury Order 180-01 (Jan. 14, 2020); see also 31 U.S.C.
310(b)(2)(I) (providing that FinCEN Director ``[a]dminister the
requirements of subchapter II of chapter 53 of this title, chapter 2
of title I of Public Law 91-508, and section 21 of the Federal
Deposit Insurance Act, to the extent delegated such authority by the
Secretary.'').
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A. 31 CFR 1022.410--Additional Records To Be Made and Retained by
Dealers in Foreign Exchange
Pursuant to 31 CFR 1022.410(a), a dealer in foreign exchange must
secure and maintain a record of the taxpayer identification number of
certain persons for whom a transaction account is opened or a line of
credit is extended. The taxpayer identification number must be obtained
and recorded within 30 days of the date the account is opened or credit
line extended, or longer if the person opening the account or seeking
the line of credit needs to apply for a taxpayer identification or
social security number. For non-resident aliens, a dealer in foreign
exchange is required to record the person's passport number or a
description of some other government document used to verify his or her
identity. A dealer in foreign exchange will not be treated as violating
31 CFR 1022.410(a) if it has made a reasonable effort to obtain a
taxpayer identification number, maintains a list containing the names,
addresses, and account or credit line numbers of those persons from
whom it has not secured a taxpayer identification number, and provides
these names, addresses, and account or credit line numbers to the
Secretary upon request. Furthermore, a dealer in foreign exchange need
not secure a taxpayer identification number in instances involving
accounts for public funds opened by agencies or instrumentalities of
federal, state, local, or foreign government, accounts for ambassadors,
career diplomatic or consular officers, military attaches, accredited
representatives to international organizations and certain other
aliens, and accounts for unincorporated subordinate units of a tax-
exempt central organization that are covered by a group exemption
letter.
Pursuant to 31 CFR 1022.410(b), a dealer in foreign exchange must
also retain the original or a copy of nine types of documents: (1)
statements of accounts from banks, including documents representing the
entries reflected on such statements; (2) daily work records, including
documents needed to identify and reconstruct currency transactions with
customers and foreign banks; (3) a record of each exchange of currency
involving transactions in excess of $1,000, including the customer's
name and address (and passport or taxpayer identification number unless
received by mail or common carrier), the date and amount of the
transaction, and the currency name, country, and total amount of each
foreign currency; (4) signature cards or other documents evidencing
signature authority over each deposit or security account, containing
specified items of information about the customer (including a record
of the actual owner of the account if customer accounts are maintained
in a code name); (5) each item, including checks, drafts, and transfers
of credit, of more than $10,000 remitted or transferred to a person,
account, or place outside the United States; (6) a record of each
receipt of currency, other monetary instruments, investment securities
and checks, and of each transfer of funds or credit, or more than
$10,000 received on any one occasion directly and not through a
domestic financial institution, from any person, account, or place
outside the United States; (7) records prepared or received by the
dealer in foreign exchange in the ordinary course of business that
would be needed to reconstruct an account and trace a check in excess
of $100 deposited in such an account through its internal recordkeeping
system to its depository institution, or to supply a description of
such a deposited check; (8) a record of the name, address, and taxpayer
identification number of any person presenting a certificate of deposit
for payment, as well as a description of the instrument and the date of
the transaction; and (9) a system of books and records that enables the
dealer in foreign exchange to prepare an accurate balance sheet and
income statement. To the extent that these records include originals or
copies of checks, drafts, monetary instruments, investment securities,
or other similar instruments, copies of front and back of such
instruments must generally be retained.\5\ If no record is made in the
ordinary course of business of any transaction with respect to which
records are required to be retained, then such a record shall be
prepared in writing.\6\ Records must be maintained for five years.\7\
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\5\ 31 CFR 1010.430(a).
\6\ 31 CFR 1010.430(b).
\7\ See 31 CFR 1010.430.
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B. 31 CFR 1023.410--Additional Records To Be Made and Retained by
Brokers or Dealers in Securities
Pursuant 31 CFR 1023.410(a), a broker or dealer in securities is
required to secure and maintain a record of certain identifying
information for persons who have opened brokerage accounts during the
period from June 30, 1972 to
[[Page 65982]]
October 1, 2003. The customer identification program (CIP) requirement
for brokers or dealers in securities has effectively superseded that
requirement, and CIP requirements are not considered in connection with
this OMB control number renewal.\8\
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\8\ 31 CFR 1023.220. The rule has a compliance date of October
1, 2003. The burden associated with the customer identification
program requirement is calculated under OMB control number 1506-
0034. For the supersession of this recordkeeping requirement, see
FinCEN, Customer Identification Program for Broker-Dealers, 68 FR
25113, 25124 (May 9, 2003).
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Pursuant to 31 CFR 1023.410(b), a broker or dealer in securities
must retain an original or copy of: (1) each document granting
signature or trading authority over each customer's account; (2) a
record of each remittance or transfer of funds, or of currency, checks,
other monetary instruments, investment securities, or credit, of more
than $10,000 to a person, account, or place outside the United States;
(3) a record of each receipt of currency, other monetary instruments,
investment securities, or checks, and of each transfer of funds or
credit, of more than $10,000 on any one occasion, not through a
domestic financial institution, from any person, account, or place
outside the United States; and (4) each record described in paragraphs
(1), (2), (3), (5), (6), (7), (8), and (9) of 17 CFR 240.17a-3(a). To
the extent that these records include originals or copies of checks,
drafts, monetary instruments, investment securities, or other similar
instruments, copies of front and back of such instruments must
generally be retained.\9\ If no record is made in the ordinary course
of business of any transaction with respect to which records are
required to be retained, then such a record shall be prepared in
writing.\10\ Records must be maintained for five years.\11\
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\9\ 31 CFR 1010.430(a).
\10\ 31 CFR 1010.430(b).
\11\ See 31 CFR 1010.430.
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II. Paperwork Reduction Act of 1995 (PRA) <SUP>12</SUP>
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\12\ Public Law 104-13, 109 Stat. 163 (codified at 44 U.S.C.
3506(c)(2)(A)).
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Title: Additional records to be made and retained by dealers in
foreign exchange and additional records to be made and retained by
brokers or dealers in securities (31 CFR 1022.410 and 31 CFR 1023.410).
OMB Control Numbers: 1506-0052 and 1506-0053.
Form Number: Not applicable.
Abstract: FinCEN is issuing this notice to renew the OMB control
numbers for record-keeping requirements for dealers in foreign exchange
and brokers or dealers in securities.
Affected Public: Businesses or other for-profit institutions, and
non-profit institutions.
Type of Review: Renewal without change of a currently approved
information collection.
Frequency: As required.
Estimated Number of Respondents: 7,101 financial institutions.\13\
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\13\ Table 1 below sets forth a distribution of the types of
financial institutions covered by this notice.
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Estimated Recordkeeping Burden:
In Part 1 of this notice, FinCEN describes the distribution of the
estimated number of financial institutions, by type, affected by each
of the regulatory requirements. In Part 2, FinCEN describes the primary
characteristics of the record-keeping requirements for dealers in
foreign exchange and brokers or dealers in securities. In addition, in
Part 2, FinCEN proposes for review and comment a renewal of the
calculation of the annual PRA burden that includes a scope and
methodology similar to that used in the 2021 notice to renew the OMB
control numbers associated with these information collections.\14\
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\14\ See FinCEN, Agency Information Collections Activities;
Proposed Renewal; Comment Request: Renewal Without Change of
Regulations Requiring Additional Records To Be Made and Retained by
Dealers in Foreign Exchange and Additional Records To Be Made and
Retained by Brokers or Dealers in Securities, 86 FR 7778 (Feb. 1,
2021).
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Part 1. Distribution of the Financial Institutions Covered by This
Notice
The distribution of financial institutions, by type, covered by
this notice is reflected in table 1 below:
Table 1. Distribution of Financial Institutions Covered by This Notice,
by Type of Financial Institution
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Number of financial
Type of financial institution institutions
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Dealers in foreign exchange.................. \a\ 3,623
Brokers or dealers in securities............. \b\ 3,478
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Total number of financial institutions... 7,101
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\a\ This number is derived from data as self-reported by MSBs identified
as active at year-end 2023 in FinCEN's publicly available MSB
registration database (available at <a href="https://www.fincen.gov/msb-state-selector">https://www.fincen.gov/msb-state-selector</a> selector, downloaded Feb. 28, 2024).
\b\ This estimate is based on a December 2023 file downloaded from data
maintained by the U.S. Securities and Exchange Commission's (SEC).
SEC, Company Information About Active Broker-Dealers available at
<a href="https://www.sec.gov/help/foiadocsbdfoia">https://www.sec.gov/help/foiadocsbdfoia</a> (accessed on Feb. 28, 2024).
In connection with a variety of initiatives FinCEN is undertaking
to implement the AML Act, FinCEN intends to conduct, in the future,
additional assessments of the PRA burden associated with BSA
requirements.
Part 2. Annual PRA Burden and Cost
OMB Control Number 1506-0052
31 CFR 1022.410(a)
Each dealer in foreign exchange must secure and maintain a record
of the taxpayer identification number of certain persons for whom a
transaction account is opened or a line of credit is extended. The
taxpayer identification number must be obtained and recorded within 30
days of the date the account is opened or credit line extended, or
longer if the person opening the account or seeking the line of credit
needs to apply for a taxpayer identification or social security number.
A dealer in foreign exchange will not be treated as violating the
requirement if it has made a reasonable effort to obtain a taxpayer
identification number, maintains a list containing the names,
addresses, and account or credit line numbers of those persons from
whom it has not secured a taxpayer identification number, and provides
these names, addresses, and account or credit line numbers to the
Secretary upon request.
31 CFR 1022.410(b)
Each dealer in foreign exchange must retain the original or a copy
of nine types of documents, as described in
[[Page 65983]]
Section I--Statutory and Regulatory Provisions above.
Due to the challenges of obtaining the total number of such records
required to be maintained by dealers in foreign exchange under 31 CFR
1022.410, in its most recent control number renewal, FinCEN estimated
that the annual recordkeeping burden per dealer in foreign exchange for
these requirements was 16 hours.\15\ FinCEN continues to estimate that
the annual hourly burden of complying with 31 CFR 1022.410 is 16 hours
per dealer in foreign exchange.
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\15\ See supra note 14.
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Multiplying 3,623 dealers in foreign exchange \16\ by 16 hours
results in a total annual hourly burden estimate of 57,968 hours.
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\16\ See supra table 1.
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OMB Control Number 1506-0053
31 CFR 1023.410(a)
As noted above, brokers or dealers in securities have no
recordkeeping responsibilities under this provision; the obligation of
brokers or dealers in securities to maintain customer identification
programs pursuant to 31 CFR 1023.220 has effectively replaced these
responsibilities.
31 CFR 1023.410(b)
Each broker or dealer in securities must retain an original or copy
of certain types of documents, as described in Section I--Statutory and
Regulatory Provisions above.
Due to the challenges of obtaining the total number of such records
required to be maintained by brokers or dealers in securities, in its
most recent control number renewal, FinCEN estimated the annual
recordkeeping burden per broker or dealer in securities for these
requirements to be 100 hours.\17\ FinCEN continues to estimate that the
annual hourly burden of complying with 31 CFR 1023.410 is 100 hours per
broker or dealer in securities.
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\17\ See supra note 14.
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Multiplying 3,478 brokers or dealers in securities \18\ by 100
hours results in a total annual hourly burden estimate of 347,800
hours.
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\18\ See supra table 1.
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Total Annual PRA Hourly Burden for OMB Control Numbers 1506-0052 and
1506-0053
FinCEN's estimate of the annual PRA burden, therefore, is 405,768
hours, as detailed in table 2 below:
Table 2--Distribution of Estimated Total Annual Burden Hours per Requirement by Type of Affected Financial
Institution
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Annual burden
Affected Number of estimate per Total annual
Regulatory requirement OMB control financial financial financial burden hours
No. institution type institutions institution per regulatory
(hours) requirement
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31 CFR 1022.410................ 1506-0052 Dealers in 3,623 16 57,968
foreign exchange.
31 CFR 1023.410................ 1506-0053 Brokers or 3,478 100 347,800
dealers in
securities.
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Total annual hour burden ........... ................. .............. ............... 405,768
hours.
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FinCEN is utilizing the same fully loaded composite hourly wage
rate of $106.30 utilized in the 2024 notices of proposed rulemaking
(NPRMs) entitled Customer Identification Programs for Registered
Investment Advisers and Exempt Reporting Companies and Anti-Money
Laundering and Countering the Financing of Terrorism Programs, as well
as in recent 60-Day Notices to renew OMB control numbers corresponding
to specific BSA regulations.\19\
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\19\ See, e.g., FinCEN and SEC, NPRM Customer Identification
Programs for Registered Investment Advisers and Exempt Reporting
Advisers, 89 FR 44571 (May 21, 2024); FinCEN, NPRM Anti-Money
Laundering and Countering the Financing of Terrorism Programs NPRM,
89 FR 55428 (July 3, 2024); FinCEN, Agency Information Collection
Activities; Proposed Renewal; Comment Request; Renewal Without
Change of the Customer Identification Program Regulatory
Requirements for Certain Financial Institutions, 89 FR 51940 (June
20, 2024); FinCEN, Agency Information Collection Activities;
Proposed Renewal; Comment Request; Renewal Without Change of Due
Diligence Programs for Correspondent Accounts for Foreign Financial
Institutions and for Private Banking Accounts, 89 FR 49273, (June
11, 2024).
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The total estimated cost of the annual PRA burden is
$43,133,138.40, as reflected in table 3 below:
Table 3--Estimated Total Cost of Annual PRA Burden
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OMB control No./regulation Burden hours Wage rate Total cost
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1506-0052 (31 CFR 1022.410).................................... 57,968 $106.30 $6,161,998.40
1506-0053 (31 CFR 1023.410).................................... 347,800 106.30 36,971,140.00
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Total cost................................................. .............. .............. 43,133,138.40
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Estimated Number of Respondents: 7,101 financial institutions, as
set out in table 1.
Estimated Total Annual Recordkeeping Burden: The estimated annual
PRA burden is approximately 405,768 hours, as set out in table 2.
Estimated Total Annual Recordkeeping Cost: The estimated total
annual PRA cost is approximately $43,133,138.40, as set out in table 3.
An Agency may not conduct or sponsor, and a person is not required
to respond to, a collection of information unless the collection of
information displays a valid OMB control number. Records required to be
retained under the BSA must be retained for five years.
Request for Comments: Comments submitted in response to this notice
will be summarized and/or included in the request for OMB approval. All
comments will become a matter of public record. Comments are invited on
the following: (1) whether the collection of information is necessary
for the proper performance of the functions of the agency, including
whether the
[[Page 65984]]
information shall have practical utility; (2) the accuracy of the
agency's estimate of the burden of the collection of information; (3)
ways to enhance the quality, utility, and clarity of the information to
be collected; (4) ways to minimize the burden of the collection of
information on respondents, including through the use of automated
collection techniques or other forms of information technology; and (5)
estimates of capital or start-up costs and costs of operation,
maintenance, and purchase of services to provide information.
Andrea M. Gacki,
Director, Financial Crimes Enforcement Network.
[FR Doc. 2024-18036 Filed 8-12-24; 8:45 am]
BILLING CODE 4810-02-P
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