Time is of the essence for complying with NYSDFS Regulation Part 504. A message from Marc Miller, Teresa Pesce, and Amy Matsuo | July 2017
KPMG’s Forensic practice recently released a Point of View (POV) paper on compliance with a forthcoming certification requirement imposed by the New York State Department of Financial Services (NYSDFS) Regulation Part 504. Under this rule, the board of directors or a senior officer in financial institutions regulated by NYSDFS must annually certify that their Bank Secrecy Act/anti-money laundering (BSA/AML) transaction monitoring systems, their sanctions filtering systems, and the governance structure they employ over those systems comply with the minimum requirements outlined in the rule.
The first annual certification is due April 15, 2018. The attached paper stresses the importance of financial institutions beginning immediately to establish a plan around compliance and certification. The plan should be informed by a detailed understanding of the institution’s transaction monitoring and filtering programs, processes, and controls as well as the accuracy and integrity of its data.
NYSDFS Regulation Part 504 is applicable to all financial institutions regulated by NYSDFS, including banks, branches and agencies of foreign banking organizations, savings and loan associations, trust entities, private banking entities, and savings banks in addition to certain nonfinancial institutions including check cashers and money transmitters. Financial institutions not regulated by NYSDFS may find the governance structure and certification framework outlined in the POV a useful road map to navigate efforts to strengthen the management and governance of their overall BSA/AML and sanctions filtering programs.