US Treasury To Impose New Reporting Rules On Mutual Funds

by Mike Godfrey, Tax-News.com, Washington

03 January 2003

In a report submitted to Congress on Tuesday, the US Treasury Department outlined plans which would require investment companies such as mutual funds to report suspicious transactions, as part of the international drive to stamp out money laundering and terrorist financing.

The recommendations made in the report - which outlines changes to the country's money laundering regime necessary in the wake of the introduction of the USA Patriot Act - would bring mutual funds into line with banks and other financial service institutions, which are already required to file suspicious activity reports.

The Treasury document also contained detail on previously announced plans to oblige investment companies which are not registered with the US Securities and Exchange Commission (SEC), such as hedge funds, to put in place more stringent customer identification and verification procedures.

According to a statement released to accompany the report: 'Treasury expects to issue further regulations consistent with the report’s recommendations in the near future.'

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