2016 NYDFS Compliance Update- AML Transaction Monitoring
Starting on January 1, 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 process and Watch List Filtering program 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.