The U.S. Treasury Department has proposed rules that would require mutual funds to report "suspicious activities," such as the use of a fund by a terrorist group, to the Treasury's Financial Crimes Enforcement Network, or FinCEN.

The rule is part of the department's efforts to crack down on the financial networks of terrorists in the wake of attacks on New York and Washington in 2001. Under the anti-terrorism bill known as the USA Patriot Act, the Treasury has already issued several rules designed to prevent terrorists from using mutual funds as money laundering vehicles.

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