Since Sept. 11, 2001, governments in the U.S. and abroad have moved aggressively to combat the problem of money laundering and terrorist financing at financial institutions. To this end, Title III of the USA Patriot Act introduces many new classes of financial institutions to many of the same anti-money laundering (AML) control requirements that banks have had to comply with for many years under the Bank Secrecy Act and other laws.

The primary goal of these new efforts is to restrict the practice of "regulatory arbitrage" on the part of financial criminals. Just as a market arbitrageur gains on inconsistencies in financial markets, launderers seek to find areas of weak control across jurisdictions and industries.

Subscribe Now

Access to premium content including in-depth coverage of mutual funds, hedge funds, 401(K)s, 529 plans, and more.

3-Week Free Trial

Insight and analysis into the management, marketing, operations and technology of the asset management industry.