[Federal Register Volume 76, Number 38 (Friday, February 25, 2011)]
[Rules and Regulations]
[Pages 10516-10522]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2011-4061]


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DEPARTMENT OF THE TREASURY

Financial Crimes Enforcement Network

31 CFR Parts 1020, 1021, 1022, 1023, 1024, 1025, 1026, 1027, and 
1028

RIN 1506-AA92


Transfer and Reorganization of Bank Secrecy Act Regulations--
Technical Amendment.

AGENCY: Financial Crimes Enforcement Network (FinCEN), Treasury.

ACTION: Final rule.

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SUMMARY: FinCEN is issuing this final rule as a technical amendment to 
new Chapter X of Title 31 of the Code of Federal Regulations, which was 
published on October 26, 2010. After that date, FinCEN published two 
final rules in Part 103 of Title 31 of the Code of Federal Regulations, 
one concerning mutual funds and the other concerning the 
confidentiality of a report of suspicious activity (SAR). This final 
rule moves the SAR confidentiality rule from Part 103 to new Chapter X 
and addresses the compliance date of the mutual fund rule. 
Additionally, the Chapter X Final Rule contained an inadvertent 
typographical error that omitted several sections from Subpart C of 
Part 1026 Rules for Futures Commission Merchants and Introducing 
Brokers in Commodities. This final rule corrects those omissions.

DATES: Effective Date: March 1, 2011.

FOR FURTHER INFORMATION CONTACT: Regulatory Policy and Programs 
Division, FinCEN (800) 949-2732 and select option 6.

SUPPLEMENTARY INFORMATION:

I. Background

    On October 26, 2010, FinCEN issued a final rule (``the Chapter X 
Final Rule''), creating a new Chapter X in title 31 of the Code of 
Federal Regulations (CFR) for Bank Secrecy Act (BSA) regulations. As 
discussed in the Chapter X Final Rule, FinCEN is reorganizing its 
regulations in new Chapter X to make them more accessible for covered 
individuals and financial institutions. The reorganization is not 
intended to have any substantive effect on the BSA regulations. Chapter 
X will be effective on March 1, 2011.\1\
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    \1\  See 75 FR 65806 (October 26, 2010) (Transfer and 
Reorganization of Bank Secrecy Act Regulations Final Rule).
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    On April 14, 2010, FinCEN issued a final rule to include mutual 
funds within the general definition of ``financial institution'' in the 
BSA regulations.\2\ On October 15, 2010, FinCEN published a final rule 
extending the compliance date for those provisions of 31 CFR 103.33 
that apply to mutual funds from January 10, 2011 to April 10, 2011; 
however, this extension of the compliance date has not otherwise 
amended the applicable regulation.\3\ The regulatory changes made by 
including mutual funds within the general definition of ``financial 
institution'' were contained in the Chapter X Final Rule. The extended 
compliance date for these provisions still applies even though they 
have moved to 31 CFR Chapter X.
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    \2\  See 75 FR 19241 (April 14, 2010) (Final Rule defining 
Mutual Funds as Financial Institutions).
    \3\ See 75 FR 63382.
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    On December 3, 2010, FinCEN issued a final rule to amend the BSA 
regulations regarding the confidentiality of a report of suspicious 
activity (``SAR''). To reflect the reorganization of BSA rules in 
Chapter X, FinCEN is issuing this technical amendment rule to move the 
revised SAR confidentiality rules, without any change to their 
applicability date, to Chapter X.
    As published, the Chapter X Final Rule contains omissions from 
Subpart C of Part 1026 Rules for Futures Commission Merchants and 
Introducing Brokers in Commodities. This final rule corrects those 
omissions.

II. Effective Date

    The effective date of this technical amendment to Chapter X will be 
March 1, 2011. As noted above, this technical amendment does not affect 
any of the applicability dates of the rules that are being moved to 
Chapter X by this technical amendment.

III. Regulatory Matters

A. Executive Order 12866

    It has been determined that this rulemaking is not a significant 
regulatory action for purposes of Executive Order 12866. Accordingly, a 
regulatory impact analysis is not required.

B. Unfunded Mandates Reform Act of 1995

    Section 202 of the Unfunded Mandates Reform Act of 1995 (``Unfunded 
Mandates Act''), Public Law 104-4 (March 22, 1995), requires that an 
agency prepare a budgetary impact statement before promulgating a rule 
that may result in expenditure by state, local, and tribal governments, 
in the aggregate, or by the private sector, of $100 million or more in 
any one year. If a budgetary impact statement is required, section 202 
of the Unfunded Mandates Act also requires an agency to identify and 
consider a reasonable number of regulatory alternatives before 
promulgating a rule. FinCEN has determined that it is not required to 
prepare a written statement under Section 202 and has concluded that on 
balance the rule provides the most cost-effective and least burdensome 
alternative to achieve the objectives of the rule.

C. Regulatory Flexibility Act

    Pursuant to the Regulatory Flexibility Act (RFA) (5 U.S.C. 602 et 
seq.), FinCEN certifies that this final regulation likely will not have 
a significant economic impact on a substantial number of small 
entities. The regulatory changes in this final rule merely restructure 
and re-codify existing regulations and do not alter current regulatory 
obligations.

D. Paperwork Reduction Act

    This regulation contains no new information collection requirements 
subject to review and approval by the Office of Management and Budget 
under the Paperwork Reduction Act of 1995 (44 U.S.C. 3507(d) et seq.). 
The information collection requirements for the Bank Secrecy Act, 
currently codified at 31 CFR Part 103, were previously approved by the 
Office of Management and Budget under OMB Control numbers 1506-0001 
through 1506-0046. Under the Paperwork Reduction Act, an agency may not 
conduct or sponsor and a person is not required to respond to a 
collection of information unless it displays a valid OMB control 
number.

List of Subjects in 31 CFR Parts 1020, 1021, 1022, 1023, 1024, 
1025, 1026, 1027, and 1028

    Administrative practice and procedure, Banks, Banking, Brokers, 
Currency, Foreign banking, Foreign currencies, Gambling, 
Investigations, Penalties, Reporting and recordkeeping requirements, 
Securities, Terrorism.

Authority and Issuance

    For the reasons set forth above, 31 CFR Chapter X, published 
October 26, 2010 (75 FR 65842), is amended as follows:

PART 1020--RULE FOR BANKS

0
1. The authority citation for part 1020 is added to read as follows:


[[Page 10517]]


    Authority: 12 U.S.C. 1829b and 1951-1959; 31 U.S.C. 5311-5314 
and 5316-5332; title III, sec. 314, Pub. L. 107-56, 115 Stat. 307.


0
2. Section 1020.320 is amended by:
0
a. Revising the last sentence of paragraph (d); and
0
b. Revising paragraphs (e) and (f); and
0
c. Adding new paragraph (g), to read as follows:


Sec.  1020.320  Reports by banks of suspicious transactions.

* * * * *
    (d) * * * A bank 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 bank for compliance 
with the Bank Secrecy Act, or any State regulatory authority 
administering a State law that requires the bank to comply with the 
Bank Secrecy Act or otherwise authorizes the State authority to ensure 
that the institution complies with the Bank Secrecy Act, upon request.
    (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 banks--(i) General rule. No bank, 
and no director, officer, employee, or agent of any bank, shall 
disclose a SAR or any information that would reveal the existence of a 
SAR. Any bank, and any director, officer, employee, or agent of any 
bank 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 a bank, or any director, officer, employee, 
or agent of a bank, 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 bank for 
compliance with the Bank Secrecy Act, or any State regulatory authority 
administering a State law that requires the bank to comply with the 
Bank Secrecy Act or otherwise authorizes the State authority to ensure 
that the bank complies with the Bank Secrecy Act; 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 a bank, or any director, officer, employee, or 
agent of the bank, of a SAR, or any information that would reveal the 
existence of a SAR, within the bank's corporate organizational 
structure for purposes consistent with Title II of the Bank Secrecy Act 
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 Bank Secrecy Act. 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.
    (f) Limitation on liability. A bank, and any director, officer, 
employee, or agent of any bank, 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. Banks 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. Such failure may also violate provisions of Title 12 of the 
Code of Federal Regulations.

PART 1021--RULES FOR CASINOS AND CARD CLUBS

0
3. The authority citation for part 1021 is added to read as follows:

    Authority: 12 U.S.C. 1829b and 1951-1959; 31 U.S.C. 5311-5314 
and 5316-5332; title III, sec. 314, Pub. L. 107-56, 115 Stat. 307.


0
4. Section 1021.320 is amended by:
0
a. Revising the last sentence of paragraph (d)
0
b. Revising paragraph (e);
0
c. Redesignating paragraphs (f) and (g) as paragraphs (g) and (h);
0
d. Adding new paragraph (f); and
0
e. Revising newly designated paragraph (g).


Sec.  1021.320  Reports by casinos of suspicious transactions.

* * * * *
    (d) * * * A casino 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 casino 
for compliance with the Bank Secrecy Act, or any State regulatory 
authority administering a State law that requires the casino to comply 
with the Bank Secrecy Act or otherwise authorizes the State authority 
to ensure that the casino complies with the Bank Secrecy Act, or any 
tribal regulatory authority administering a tribal law that requires 
the casino to comply with the Bank Secrecy Act or otherwise authorizes 
the tribal regulatory authority to ensure that the casino complies with 
the Bank Secrecy Act, upon request.
    (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 casinos--(i) General rule. No 
casino, and no director, officer, employee, or agent of any casino, 
shall disclose a SAR or any information that would reveal the existence 
of a SAR. Any casino, and any director, officer, employee, or agent of 
any casino 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

[[Page 10518]]

suspicious transaction is notified that the transaction has been 
reported, this paragraph (e)(1) shall not be construed as prohibiting:
    (A) The disclosure by a casino, or any director, officer, employee, 
or agent of a casino, 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 casino for 
compliance with the Bank Secrecy Act, or any State regulatory authority 
administering a State law that requires the casino to comply with the 
Bank Secrecy Act or otherwise authorizes the State authority to ensure 
that the casino complies with the Bank Secrecy Act, or any tribal 
regulatory authority administering a tribal law that requires the 
casino to comply with the Bank Secrecy Act or otherwise authorizes the 
tribal regulatory authority to ensure that casino complies with the 
Bank Secrecy Act; or
    (2) The underlying facts, transactions, and documents upon which a 
SAR is based, including but not limited to, disclosures to another 
financial institution, or any director, officer, employee, or agent of 
a financial institution, for the preparation of a joint SAR.
    (B) The sharing by a casino, or any director, officer, employee, or 
agent of the casino, of a SAR, or any information that would reveal the 
existence of a SAR, within the casino's corporate organizational 
structure for purposes consistent with Title II of the Bank Secrecy Act 
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 Bank Secrecy Act (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.
    (f) Limitation on liability. A casino, and any director, officer, 
employee, or agent of any casino, 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. Casinos 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.
* * * * *

PART 1022--RULES FOR MONEY SERVICES BUSINESSES

0
5. The authority citation for part 1022 is added to read as follows:

    Authority:  12 U.S.C. 1829b and 1951-1959; 31 U.S.C. 5311-5314 
and 5316-5332; title III, sec. 314, Pub. L. 107-56, 115 Stat. 307.


0
6. Section 1022.320 is amended by:
0
a. Revising the last sentence of paragraph (c);
0
b. Revising paragraph (d);
0
c. Redesignating paragraphs (e) and (f) as paragraphs (f) and (g);
0
d. Adding new paragraph (e); and
0
e. Revising newly designated paragraph (f), to read as follows:


Sec.  1022.320  Reports by money services businesses of suspicious 
transactions.

* * * * *
    (c) * * * A money services business 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 money services business for compliance with the Bank Secrecy Act, 
or any State regulatory authority administering a State law that 
requires the money services business to comply with the Bank Secrecy 
Act or otherwise authorizes the State authority to ensure that the 
money services business complies with the Bank Secrecy Act.
    (d) 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 (d). For purposes of 
this paragraph (d) only, a SAR shall include any suspicious activity 
report filed with FinCEN pursuant to any regulation in this chapter.
    (1) Prohibition on disclosures by money services businesses--(i) 
General rule. No money services business, and no director, officer, 
employee, or agent of any money services business, shall disclose a SAR 
or any information that would reveal the existence of a SAR. Any money 
services business, and any director, officer, employee, or agent of any 
money services business 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 (d)(1) shall not be construed as 
prohibiting:
    (A) The disclosure by a money services business, or any director, 
officer, employee, or agent of a money services business, 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 money services 
business for compliance with the Bank Secrecy Act, or any State 
regulatory authority administering a State law that requires the money 
services business to comply with the Bank Secrecy Act or otherwise 
authorizes the State authority to ensure that the money services 
business complies with the Bank Secrecy Act; or
    (2) The underlying facts, transactions, and documents upon which a 
SAR is based, including but not limited to, disclosures to another 
financial institution, or any director, officer, employee, or agent of 
a financial institution, for the preparation of a joint SAR.
    (B) The sharing by a money services business, or any director, 
officer, employee, or agent of the money services business, of a SAR, 
or any information that would reveal the existence of a SAR, within the 
money services business's corporate organizational structure for 
purposes consistent with Title II of the Bank Secrecy Act 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 Bank Secrecy Act. For purposes of this 
section, ``official duties'' shall not include the disclosure of a SAR, 
or any information that would

[[Page 10519]]

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.
    (e) Limitation on liability. A money services business, and any 
director, officer, employee, or agent of any money services business, 
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).
    (f) Compliance. Money services businesses 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.
* * * * *

PART 1023--RULES FOR BROKERS OR DEALERS IN SECURITIES

0
7. The authority citation for part 1023 is added to read as follows:


    Authority: 12 U.S.C. 1829b and 1951-1959; 31 U.S.C. 5311-5314 
and 5316-5332; title III, sec. 314, Pub. L. 107-56, 115 Stat. 307.


0
8. Section 1023.320 is amended by revising the last sentence in 
paragraph (d), and by revising paragraphs (e), (f), and (g) to read as 
follows:


Sec.  1023.320  Reports by brokers or dealers in securities of 
suspicious transactions.

* * * * *
    (d) * * * A broker-dealer 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 broker-
dealer for compliance with the Bank Secrecy Act, upon request; or to 
any SRO that examines the broker-dealer for compliance with the 
requirements of this section, upon the request of the Securities and 
Exchange 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 brokers or dealers in securities. 
(i) General rule. No broker-dealer, and no director, officer, employee, 
or agent of any broker-dealer, shall disclose a SAR or any information 
that would reveal the existence of a SAR. Any broker-dealer, and any 
director, officer, employee, or agent of any broker-dealer 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 a broker-dealer, or any director, officer, 
employee, or agent of a broker-dealer, 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 broker-dealer for 
compliance with the Bank Secrecy Act; or to any SRO that examines the 
broker-dealer for compliance with the requirements of this section, 
upon the request of the Securities Exchange 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 a broker-dealer, or any director, officer, 
employee, or agent of the broker-dealer, of a SAR, or any information 
that would reveal the existence of a SAR, within the broker-dealer's 
corporate organizational structure for purposes consistent with Title 
II of the Bank Secrecy Act 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 Bank Secrecy Act. 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 the Securities and 
Exchange 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 with the consent of the Securities Exchange 
Commission, in a manner consistent with Title II of the Bank Secrecy 
Act. 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.
    (f) Limitation on liability. A broker-dealer, and any director, 
officer, employee, or agent of any broker-dealer, 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. Broker-dealers 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.
* * * * *

PART 1024--RULES FOR MUTUAL FUNDS

0
9. The authority citation for part 1024 is added to read as follows:

    Authority:  12 U.S.C. 1829b and 1951-1959; 31 U.S.C. 5311-5314 
and 5316-5332; title III, sec. 314, Pub. L. 107-56, 115 Stat. 307.


0
10. Section 1024.320 is amended by:

[[Page 10520]]

0
a. Revising the last sentence of paragraph (c); and
0
b. Revising paragraphs (d), (e), and (f), to read as follows:


Sec.  1024.320  Reports by mutual funds of suspicious transactions.

* * * * *
    (c) * * * The mutual fund 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 mutual 
fund for compliance with the Bank Secrecy Act, upon request.
    (d) 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 (d). For purposes of 
this paragraph (d) only, a SAR shall include any suspicious activity 
report filed with FinCEN pursuant to any regulation in this chapter.
    (1) Prohibition on disclosures by mutual funds--(i) General rule. 
No mutual fund, and no director, officer, employee, or agent of any 
mutual fund, shall disclose a SAR or any information that would reveal 
the existence of a SAR. Any mutual fund, and any director, officer, 
employee, or agent of any mutual fund 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 (d)(1) shall not be construed as 
prohibiting:
    (A) The disclosure by a mutual fund, or any director, officer, 
employee, or agent of a mutual fund, 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 mutual fund for 
compliance with the Bank Secrecy Act; or
    (2) The underlying facts, transactions, and documents upon which a 
SAR is based, including but not limited to, disclosures to another 
financial institution, or any director, officer, employee, or agent of 
a financial institution, for the preparation of a joint SAR; or
    (B) The sharing by a mutual fund, or any director, officer, 
employee, or agent of the mutual fund, of a SAR, or any information 
that would reveal the existence of a SAR, within the mutual fund's 
corporate organizational structure for purposes consistent with Title 
II of the Bank Secrecy Act 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 Bank Secrecy Act. 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.
    (e) Limitation on liability. A mutual fund, and any director, 
officer, employee, or agent of any mutual fund, 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).
    (f) Compliance. Mutual funds 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.
* * * * *

PART 1025--RULES FOR INSURANCE COMPANIES

0
11. The authority citation for part 1025 is added to read as follows:

    Authority: 12 U.S.C. 1829b and 1951-1959; 31 U.S.C. 5311-5314 
and 5316-5332; title III, sec. 314, Pub. L. 107-56, 115 Stat. 307.


0
12. Section 1025.320 is amended by:
0
a. Revising the last sentence of paragraph (d);
0
b. Revising paragraph (e);
0
c. Redesignating paragraphs (f) through (h) as paragraphs (g) through 
(i);
0
d. Adding new paragraph (f); and
0
e. Revising newly designated paragraph (g), to read as follows:


Sec.  1025.320  Reports by insurance companies of suspicious 
transactions.

* * * * *
    (d) * * * An insurance company 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 insurance company for compliance with the Bank Secrecy Act, or any 
State regulatory authority administering a State law that requires the 
insurance company to comply with the Bank Secrecy Act or otherwise 
authorizes the State authority to ensure that the institution complies 
with the Bank Secrecy Act, upon request.
    (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 insurance companies--(i) General 
rule. No insurance company, and no director, officer, employee, or 
agent of any insurance company, shall disclose a SAR or any information 
that would reveal the existence of a SAR. Any insurance company, and 
any director, officer, employee, or agent of any insurance company 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 insurance company, or any director, 
officer, employee, or agent of an insurance company, 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 insurance company 
for compliance with the Bank Secrecy Act, or any State regulatory 
authority administering a State law that requires the insurance company 
to comply with the Bank Secrecy Act or otherwise authorizes the State 
authority to ensure that the

[[Page 10521]]

institution complies with the Bank Secrecy Act; or
    (2) The underlying facts, transactions, and documents upon which a 
SAR is based, including but not limited to, disclosures to another 
financial institution, or any director, officer, employee, or agent of 
a financial institution, for the preparation of a joint SAR.
    (B) The sharing by an insurance company, or any director, officer, 
employee, or agent of the insurance company, of a SAR, or any 
information that would reveal the existence of a SAR, within the 
insurance company's corporate organizational structure for purposes 
consistent with Title II of the Bank Secrecy Act 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 Bank Secrecy Act. 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.
    (f) Limitation on liability. An insurance company, and any 
director, officer, employee, or agent of any insurance company, 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. Insurance companies 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.
* * * * *

PART 1026--RULES FOR FUTURES COMMISSION MERCHANTS AND INTRODUCING 
BROKERS IN COMMODITIES

0
13. The authority citation for part 1026 is added to read as follows:

    Authority: 12 U.S.C. 1829b and 1951-1959; 31 U.S.C. 5311-5314 
and 5316-5332; title III, sec. 314, Pub. L. 107-56, 115 Stat. 307.


0
14. Sections 1026.311, 1026.312, 1026.313 and 1026.314 are added to 
Subpart C to read as follows:


Sec.  1026.311  Filing obligations.

    Refer to Sec.  1010.311 of this Chapter for reports of transactions 
in currency filing obligations for futures commission merchants and 
introducing brokers in commodities.


Sec.  1026.312  Identification required.

    Refer to Sec.  1010.312 of this Chapter for identification 
requirements for reports of transactions in currency filed by futures 
commission merchants and introducing brokers in commodities.


Sec.  1026.313  Aggregation.

    Refer to Sec.  1010.313 of this Chapter for reports of transactions 
in currency aggregation requirements for futures commission merchants 
and introducing brokers in commodities.


Sec.  1026.314  Structured transactions.

    Refer to Sec.  1010.314 of this Chapter for rules regarding 
structured transactions for futures commission merchants and 
introducing brokers in commodities.

0
15. Section 1026.320 is amended by revising the last sentence in 
paragraph (d), and by revising paragraphs (e), (f), and (g) to read as 
follows:


Sec.  1026.320  Reports by futures commission merchants and introducing 
brokers in commodities of suspicious transactions.

* * * * *
    (d) * * * 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,

[[Page 10522]]

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.
    (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.
* * * * *

PART 1027--RULES FOR DEALERS IN PRECIOUS METALS, PRECIOUS STONES, 
OR JEWELS

0
16. The authority citation for part 1027 is added to read as follows:

    Authority: 12 U.S.C. 1829b and 1951-1959; 31 U.S.C. 5311-5314 
and 5316-5332; title III, sec. 314, Pub. L. 107-56, 115 Stat. 307.

PART 1028--RULES FOR OPERATORS OF CREDIT CARD SYSTEMS

0
17. The authority citation for part 1028 is added to read as follows:

    Authority: 12 U.S.C. 1829b and 1951-1959; 31 U.S.C. 5311-5314 
and 5316-5332; title III, sec. 314, Pub. L. 107-56, 115 Stat. 307.

    Dated: February 16, 2011.
James H. Freis, Jr.,
Director, Financial Crimes Enforcement Network.
[FR Doc. 2011-4061 Filed 2-24-11; 8:45 am]
BILLING CODE 4810-02-P