Here is the converted article in Markdown format:

RIA CFT Program: Preparing for FinCEN’s New Rule

In a move aimed at enhancing corporate transparency and combating financial crimes, the US Department of the Treasury’s Financial Crimes Enforcement Network (FinCEN) has proposed a new rule under the Corporate Transparency Act (CTA). As a result, private fund limited partnership agreements (LPAs) related to the CTA may need updates.

Standard LPA Provisions

LPAs typically contain provisions that acknowledge the potential requirements of the CTA. These include:

Acknowledgments of beneficial ownership information reports and compliance with associated regulations
Cooperation with requests for information
Compliance with the CTA Requirements, including timely filing of required reports

In light of FinCEN’s proposed rule, these standard LPA provisions will likely need to be updated to incorporate the new requirements.

CTA Provisions

The Managing Member is responsible for ensuring compliance with the Corporate Transparency Act and its associated regulations. This includes:

Filing beneficial ownership information reports
Maintaining accurate records of ownership interests
Providing required information to FinCEN

In case of non-compliance, the Managing Member may be subject to civil and/or criminal penalties.

AML Provisions

LPAs already contain robust Anti-Money Laundering (AML) provisions due to other jurisdictions’ requirements. These provisions will likely need to be updated to incorporate the new FinCEN rule.

Update Expectations

The final rule’s content will determine the extent of updates needed for LPA provisions related to the CTA. Given the complexity of the proposed rule, it is essential that private fund LPAs are reviewed and updated accordingly to ensure compliance with the new regulations.

RIA CFT Program Insights

Our expert team has extensive experience in advising financial institutions on CFT program implementation and compliance. We can help your organization navigate the complexities of FinCEN’s new rule and update your LPA provisions accordingly.