[Code of Federal Regulations]

[Title 31, Volume 1]

[Revised as of July 1, 2005]

From the U.S. Government Printing Office via GPO Access

[CITE: 31CFR103.17]



[Page 374-376]

 

                  TITLE 31--MONEY AND FINANCE: TREASURY

 

                       DEPARTMENT OF THE TREASURY

 

PART 103_FINANCIAL RECORDKEEPING AND REPORTING OF CURRENCY AND FOREIGN 

TRANSACTIONS--Table of Contents

 

                  Subpart B_Reports Required To Be Made

 

Sec. 103.17  Reports by futures commission merchants and introducing 

brokers in commodities of suspicious transactions.



    (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 Commodity 

Futures Trading Commission (``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 part or of any other regulations 

promulgated under the Bank Secrecy Act (``BSA''), Public Law 91-508, as 

amended, codified at 12 U.S.C. 1829b, 12 U.S.C. 1951-1959, and 31 U.S.C. 

5311-5314, 5316-5332;

    (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.

    (b) Filing procedures--(1) What to file. A suspicious transaction 

shall be reported by completing a Suspicious Activity Report-Securities 

and Futures Industry (``SAR-SF''), and collecting and maintaining 

supporting documentation as required by paragraph (d) of this section.

    (2) Where to file. The SAR-SF shall be filed with FinCEN in a 

central location, to be determined by FinCEN, as indicated in the 

instructions to the SAR-SF.

    (3) When to file. A SAR-SF 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-SF 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-SF 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



[[Page 375]]



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-SF. 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-SF 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.

    (c) Exceptions--(1) An FCM or IB-C is not required to file a SAR-SF 

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).

    (d) Retention of records. An FCM or IB-C shall maintain a copy of 

any SAR-SF 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-SF. 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-SF. An FCM or IB-C shall make all supporting 

documentation available to FinCEN, the CFTC, or any other appropriate 

law enforcement agency or regulatory agency, and, for purposes of 

paragraph (g) of this section, to any registered futures association, 

registered entity, or self-regulatory organization (``SRO'') (as defined 

in section 3(a)(26) of the Securities Exchange Act of 1934, 15 U.S.C. 

78c(a)(26)), upon request.

    (e) Confidentiality of reports. No financial institution, and no 

director, officer, employee, or agent of any financial institution, who 

reports a suspicious transaction under this part, may notify any person 

involved in the transaction that the transaction has been reported, 

except to the extent permitted by paragraph (a)(3) of this section. 

Thus, any person subpoenaed or otherwise requested to disclose a SAR-SF 

or the information contained in a SAR-SF, except where such disclosure 

is requested by FinCEN, the CFTC, another appropriate law enforcement or 

regulatory agency, or for purposes of paragraph (g) of this section, a 

registered futures association, registered entity, or SRO shall decline 

to produce the SAR-SF or to provide any information that would disclose 

that a SAR-SF has been prepared or filed, citing this paragraph and 31 

U.S.C. 5318(g)(2), and shall notify FinCEN of any such request and its 

response thereto.

    (f) Limitation of liability. An FCM or IB-C, and any director, 

officer, employee, or agent of such FCM or IB-C, that makes a report of 

any possible violation of law or regulation pursuant to this section or 

any other authority (or voluntarily) shall not be liable to any person 

under any law or regulation of the United States (or otherwise to the 

extent also provided in 31 U.S.C. 5318(g)(3), including in any 

arbitration or reparations proceeding) for any disclosure contained in, 

or for failure to disclose the fact of, such report.

    (g) Examination and enforcement. Compliance with this section shall 

be examined by the Department of the Treasury, through FinCEN or its 

delegates, under the terms of the BSA. Reports filed under this section 

or Sec. 103.19



[[Page 376]]



(including any supporting documentation), and documentation 

demonstrating reliance on an exception under paragraph (c) of this 

section or Sec. 103.19, shall be made available, upon request, to the 

CFTC, Securities and Exchange Commission, and any registered futures 

association, registered entity, or SRO, examining an FCM, IB-C, or 

broker or dealer in securities for compliance with the requirements of 

this section or Sec. 103.19. Failure to satisfy the requirements of 

this section may constitute a violation of the reporting rules of the 

BSA or of this part.

    (h) Effective date. This section applies to transactions occurring 

after May 18, 2004.



[68 FR 65398, Nov. 20, 2003]