Act Now Ahead of the 2026 SEC Rule

The effective date of January 1, 2026 for adoption of the new Anti-Money Laundering (“AML”) program rule (“the Rule”) for most Registered Investment Advisors (RIAs) and Exempt Reporting Advisors (ERAs) is quickly approaching (“Covered IAs”).  As discussed in a recent blog, Time for Investment Advisors to Invest in AML Technology, the Rule passed in September 2024 by the U.S. Treasury Department’s Financial Crimes Enforcement Network (“FinCEN”) imposes significant new responsibilities for Compliance teams, including a need for comprehensive transaction monitoring and suspicious activity reporting.    

This was a hot topic at the 2025 SIFMA AML Conference, as the industry balances the need to move forward with preparations while at the same time hoping for some reprieve coming out of recent regulatory uncertainty.  Specifically, Treasury representatives attending the SIFMA conference re-affirmed that all current rules are “under review” and that a pause remains in effect for the release of additional rule-making, including rules for the Customer Identity Program that directly impacts the execution of AML Customer Due Diligence (CDD) by the  Covered IAs.    

However, it was also made clear that RIAs should not take this uncertainty as an excuse to wait-and-see.  The message to RIAs in attendance was that they are strongly encouraged to prepare for the January 2026 effective date and to not assume that the Administration will roll-back the Rule or put it on hold prior to January.  In fact, the Securities and Exchange Commission (SEC), which is the regulator delegated examination authority over the Rule, indicated that firms should be prepared to answer questions during ongoing examination cycles this Fall as to what steps are being taken to be compliant with the rules by the new year.   

Building or expanding an existing program

For RIAs owned by Banks or Broker-dealers, which already have AML programs in place, existing AML programs may be extended to the RIAs to provide coverage. However, specific considerations still need to be made on expanding execution to key areas like RIA transaction monitoring, investigations and regulatory reporting, which are historically key areas of focus for SEC examiners. The ability to identify and report suspicious activity conducted or attempted “by, at or through” an institution will need special attention to satisfy regulatory scrutiny and comply with Suspicious Activity Reporting (SAR) reporting requirements under SEC Rule 17a-8. 

Implementing effective monitoring in this space will require the use of network-based and context-driven transaction monitoring, which goes beyond the capabilities of traditional rules-based monitoring systems.   

Rules-based systems, which rely on predefined thresholds and static typologies, often generate high volumes of false positives while missing complex patterns that indicate real risk. They lack the ability to see the bigger picture: how entities are connected, how behaviors evolve over time, and how seemingly low-risk activities can escalate in certain network contexts. 

To comply effectively—and reduce regulatory and reputational risk—RIAs need to move beyond tick-box monitoring to a model that incorporates contextual intelligence, entity resolution, and network detection. 

What you can do now 

The AML Program Rule marks a major turning point for RIAs. But with the right technology and a proactive approach, it also offers an opportunity: to strengthen your defenses, modernize your compliance posture, and demonstrate to regulators that you are serious about mitigating financial crime. 

At Quantexa, we’re helping financial services firms across the industry to adopt innovative technologies to increase the effectiveness of AML transaction monitoring. Discover how our AML Solutions help firms stay ahead of risk. 

Learn more about how Quantex’s entity resolution, advanced analytics and network-based detection create additional insights into activity by, at or through your RIA. Contact us at Quantexa.com to learn more about making your IA transaction monitoring effective in today’s complex environment.