The Securities and Exchange Commission (SEC), established in 1934, oversees roughly $97 trillion in annual US equity market trading and supervises more than 27,000 entities across the securities industry — a scale that makes its role in enforcing AML obligations for broker-dealers and investment companies as significant as any banking regulator's.
What is the SEC's core mission?
Three things: protecting investors, maintaining fair, orderly, and efficient markets, and facilitating capital formation. Investor protection means companies offering securities to the public must disclose truthful information about their business and the risks involved, and that brokers, dealers, investment advisers, and exchanges treat investors fairly and honestly — enforcement against violations has returned over a billion dollars to harmed investors in a single fiscal year in the SEC's own reporting.
How is the SEC actually structured?
Five divisions: Corporate Finance, Trading & Markets, Investment Management, Enforcement, and Economic & Risk Analysis — headquartered in Washington DC, with 11 regional offices spread across the US. Its remit spans monitoring securities exchanges, brokers and dealers, and investment advisers and mutual funds, with a mandate covering money laundering, terrorism financing, insider trading, and fraud specifically, not just disclosure and market conduct generally.
What does the SEC's examination arm actually check?
The Office of Compliance Inspections and Examinations (OCIE) identifies key risks, trends, and examination priorities across four pillars: promoting compliance, preventing fraud, identifying and monitoring risk, and informing policy. For AML purposes specifically, OCIE prioritises examining broker-dealers and investment companies on customer identification programs, SAR filing obligations, customer due diligence, beneficial ownership requirements, and independent testing of the firm's own AML programme.
What does the Bank Secrecy Act actually require of SEC-regulated firms?
Broker-dealers and investment companies must establish AML programs with policies and procedures reasonably designed to identify and verify customer identity and the beneficial owners of legal entity customers; perform customer due diligence under the Customer Due Diligence rule; and monitor for suspicious activity, filing Suspicious Activity Reports with FinCEN where warranted. The underlying goal OCIE examines against is straightforward even if the compliance programme itself isn't: policies and procedures genuinely designed to catch suspicious and illegal money-laundering activity, not just paperwork that exists to be shown to an examiner.
