(a) General.
(1) Every futures commission merchant (“FCM”)
and introducing broker in commodities (“IB-C”) within the United States
shall file with FinCEN, to the extent and in the manner required by
this section, a report of any suspicious transaction relevant to a
possible violation of law or regulation. An FCM or IB-C may also file
with FinCEN a report of any suspicious transaction that it believes
is relevant to the possible violation of any law or regulation but
whose reporting is not required by this section. Filing a report of
a suspicious transaction does not relieve an FCM or IB-C from the
responsibility of complying with any other reporting requirements
imposed by the CFTC or any registered futures association or registered
entity as those terms are defined in the Commodity Exchange Act (“CEA”),
7 U.S.C. 21 and 7 U.S.C. 1a(29).
(2) A transaction requires reporting under
the terms of this section if it is conducted or attempted by, at,
or through an FCM or IB-C, it involves or aggregates funds or other
assets of at least $5,000, and the FCM or IB-C knows, suspects, or
has reason to suspect that the transaction (or a pattern of transactions
of which the transaction is a part):
(i) Involves funds derived
from illegal activity or is intended or conducted in order to hide
or disguise funds or assets derived from illegal activity (including,
without limitation, the ownership, nature, source, location, or control
of such funds or assets) as part of a plan to violate or evade any
Federal law or regulation or to avoid any transaction reporting requirement
under Federal law or regulation;
(ii) Is designed, whether through structuring
or other means, to evade any requirements of this chapter or of any
other regulations promulgated under the Bank Secrecy Act;
(iii) Has no business or
apparent lawful purpose or is not the sort in which the particular
customer would normally be expected to engage, and the FCM or IB-C
knows of no reasonable explanation for the transaction after examining
the available facts, including the background and possible purpose
of the transaction; or
(iv) Involves use of the FCM or IB-C to facilitate criminal activity.
(3) The obligation
to identify and properly and timely to report a suspicious transaction
rests with each FCM and IB-C involved in the transaction, provided
that no more than one report is required to be filed by any of the
FCMs or IB-Cs involved in a particular transaction, so long as the
report filed contains all relevant facts.
3-1735.31
(b) Filing procedures.
(1) What to file. A suspicious transaction shall be reported by
completing a Suspicious Activity Report (“SAR”), and collecting and
maintaining supporting documentation as required by paragraph (d)
of this section.
(2) Where to file. The SAR shall be filed with
FinCEN in a central location, to be determined by FinCEN, as indicated
in the instructions to the SAR.
(3) When to file. A SAR shall be filed no later than 30 calendar days after the date
of the initial detection by the reporting FCM or IB-C of facts that
may constitute a basis for filing a SAR under this section. If no
suspect is identified on the date of such initial detection, an FCM
or IB-C may delay filing a SAR for an additional 30 calendar days
to identify a suspect, but in no case shall reporting be delayed
more than 60 calendar days after the date of such initial detection.
In situations involving violations that require immediate attention,
such as terrorist financing or ongoing money laundering schemes, the
FCM or IB-C shall immediately notify by telephone an appropriate law
enforcement authority in addition to filing timely a SAR. FCMs and
IB-Cs wishing voluntarily to report suspicious transactions that may
relate to terrorist activity may call FinCEN’s Financial Institutions
Hotline at 1-866-556-3974 in addition to filing timely a SAR if required
by this section. The FCM or IB-C may also, but is not required to,
contact the CFTC to report in such situations.
3-1735.32
(c) Exceptions.
(1) An FCM or IB-C is not required to file
a SAR to report—
(i) A robbery or burglary committed
or attempted of the FCM or IB-C that is reported to appropriate law
enforcement authorities;
(ii) A violation otherwise required
to be reported under the CEA (7 U.S.C. 1 et seq.), the regulations
of the CFTC (17 CFR chapter I), or the rules of any registered futures
association or registered entity as those terms are defined in the
CEA, 7 U.S.C. 21 and 7 U.S.C. 1a(29), by the FCM or IB-C or any of
its officers, directors, employees, or associated persons, other than
a violation of 17 CFR 42.2, as long as such violation is appropriately
reported to the CFTC or a registered futures association or registered
entity.
(2) An FCM or IB-C may be required to demonstrate that it has relied
on an exception in paragraph (c)(1) of this section, and must maintain
records of its determinations to do so for the period specified in
paragraph (d) of this section. To the extent that a Form 8-R, 8-T,
U-5, or any other similar form concerning the transaction is filed
consistent with CFTC, registered futures association, or registered
entity rules, a copy of that form will be a sufficient record for
the purposes of this paragraph (c)(2).
3-1735.33
(d) Retention of records. An FCM or IB-C shall maintain a copy of any SAR filed and the original
or business record equivalent of any supporting documentation for
a period of five years from the date of filing the SAR. Supporting
documentation shall be identified as such and maintained by the FCM
or IB-C, and shall be deemed to have been filed with the SAR. An FCM
or IB-C shall make all supporting documentation available to FinCEN
or any Federal, State, or local law enforcement agency, or any Federal
regulatory authority that examines the FCM or IB-C for compliance
with the BSA, upon request; or to any registered futures association
or registered entity (as defined in the Commodity Exchange Act, 7
U.S.C. 21 and 7 U.S.C. 1(a)(29)) (collectively, a self-regulatory
organization (“SRO”)) that examines the FCM or IB-C for compliance
with the requirements of this section, upon the request of the Commodity
Futures Trading Commission.
(e) Confidentiality of SARs. A SAR, and any
information that would reveal the existence of a SAR, are confidential
and shall not be disclosed except as authorized in this paragraph
(e). For purposes of this paragraph (e) only, a SAR shall include
any suspicious activity report filed with FinCEN pursuant to any regulation
in this chapter.
(1) Prohibition
on disclosures by futures commission merchants and introducing brokers
in commodities.
(i) General
rule. No FCM or IB-C, and no director, officer, employee, or
agent of any FCM or IB-C, shall disclose a SAR or any information
that would reveal the existence of a SAR. Any FCM or IB-C, and any
director, officer, employee, or agent of any FCM or IB-C that is subpoenaed
or otherwise requested to disclose a SAR or any information that would
reveal the existence of a SAR, shall decline to produce the SAR or
such information, citing this section and 31 U.S.C. 5318(g)(2)(A)(i),
and shall notify FinCEN of any such request and the response
thereto.
(ii) Rules of construction. Provided that no
person involved in any reported suspicious transaction is notified
that the transaction has been reported, this paragraph (e)(1) shall
not be construed as prohibiting:
(A) The disclosure by an FCM or
IB-C, or any director, officer, employee, or agent of an FCM or IB-C,
of:
(1) A SAR, or any information
that would reveal the existence of a SAR, to FinCEN or any Federal,
State, or local law enforcement agency, or any Federal regulatory
authority that examines the FCM or IB-C for compliance with the BSA;
or to any SRO that examines the FCM or IB-C for compliance with the
requirements of this section, upon the request of the Commodity Futures
Trading Commission; or
(2) The underlying facts, transactions, and documents upon
which a SAR is based, including but not limited to, disclosures:
(i) To another financial institution,
or any director, officer, employee, or agent of a financial institution,
for the preparation of a joint SAR; or
(ii) In connection with certain employment
references or termination notices, to the full extent authorized in
31 U.S.C. 5318(g)(2)(B); or
(B) The sharing by an FCM or
IB-C, or any director, officer, employee, or agent of the FCM or IB-C,
of a SAR, or any information that would reveal the existence of a
SAR, within the FCM’s or IB-C’s corporate organizational structure
for purposes consistent with title II of the BSA as determined by
regulation or in guidance.
(2) Prohibition on disclosures by government authorities. A Federal,
State, local, territorial, or Tribal government authority, or any
director, officer, employee, or agent of any of the foregoing, shall
not disclose a SAR, or any information that would reveal the existence
of a SAR, except as necessary to fulfill official duties consistent
with title II of the BSA. For purposes of this section, “official
duties” shall not include the disclosure of a SAR, or any information
that would reveal the existence of a SAR, in response to a request
for disclosure of non-public information or a request for use in a
private legal proceeding, including a request pursuant to 31 CFR 1.11.
(3) Prohibition on disclosures by self-regulatory
organizations. Any self-regulatory organization registered with
or designated by the Commodity Futures Trading Commission, or any
director, officer, employee, or agent of any of the foregoing, shall
not disclose a SAR, or any information that would reveal the existence
of a SAR except as necessary to fulfill self-regulatory duties upon
the request of the Commodity Futures Trading Commission, in a manner
consistent with title II of the BSA. For purposes of this section,
“self-regulatory duties” shall not include the disclosure of a SAR,
or any information that would reveal the existence of a SAR, in response
to a request for disclosure of non-public information or a request
for use in a private legal proceeding.
3-1735.34
(f) Limitation on liability. An FCM or IB-C, and any director, officer, employee, or agent of
any FCM or IB-C, that makes a voluntary disclosure of any possible
violation of law or regulation to a government agency or makes a disclosure
pursuant to this section or any other authority, including a disclosure
made jointly with another institution, shall be protected from liability
to any person for any such disclosure, or for failure to provide notice
of such disclosure to any person identified in the disclosure, or
both, to the full extent provided by 31 U.S.C. 5318(g)(3).
(g) Compliance. FCMs or
IB-Cs shall be examined by FinCEN or its delegatees for compliance
with this section. Failure to satisfy the requirements of this section
may be a violation of the Bank Secrecy Act and of this chapter.
(h) Applicability date. This section applies to transactions occurring after May 18, 2004.
