Starting on January 1st, New York chartered and regulated bank and nonbank institutions will be required to implement and maintain a Transaction Monitoring Program and a Watch List Filtering Program. The purpose of these programs will be to monitor and filter transactions for potential violations to the Bank Secrecy Act (BSA) or Anti-Money Laundering (AML) regulations. This will also work to prevent transactions with sanctions entities.
Within the NYDFS regulation, there are a few specific elements that must be included in the Transaction Monitoring and Watch List Filtering programs in order to be compliant. These elements include conducting a risk assessment of the organization, testing of the new Monitoring and Filtering programs, documenting parameters, tools, processes/technologies, and ongoing analysis. Additional requirements to the programs include identification and validation of all data sources, governance and management oversight.
All New York financial institutions will need to adopt an annual board resolution, or a senior compliance finding to clarify your compliance with the regulation. Within this document, it must state that your board of directors or a senior officer review documents, reports, certifications, and opinions of officers as well as other relevant parties in order for it to certify compliance. For a copy of the final regulation, and for a sample form that should be adopted and submitted to the NYDFS, click here.
For WolfPAC Regulatory Compliance module clients, we have already added a new state questionnaire to address the new regulation. The New York Transaction Monitoring and Filtering Programs questionnaire is in addition to other New York specific risk assessments that cover lending, retail, and data security laws. Using this questionnaire will help your organization meet its compliance obligations, and will also allow you to create a monitoring program within the module to ensure your organization is compliant as you continue processing transactions. Using our new questionnaire takes the confusion out of creating these monitoring and filtering programs, so you can keep your mind on growing your business.