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Federal Reserve Bank of Dallas
2200 N. PEARL ST.
DALLAS, TX 75201-2272

January 30, 2006

Notice 06-07

TO: The Chief Executive Officer of each
financial institution and others concerned
in the Eleventh Federal Reserve District

SUBJECT

Interagency Guidance on Sharing Suspicious Activity Reports
with Head Offices and Controlling Companies
DETAILS

The U.S. Department of the Treasury’s Financial Crimes Enforcement Network (FinCEN),
along with the Board of Governors of the Federal Reserve System, Federal Deposit Insurance
Corporation, Office of the Comptroller of the Currency, and Office of Thrift Supervision, has
issued an interagency guidance for banking organizations on Sharing Suspicious Activity Reports
with Head Offices and Controlling Companies. The guidance confirms that
1. A U.S. branch or agency of a foreign bank may disclose a Suspicious Activity Report
to its head office outside the United States; and
2. A U.S. depository institution may disclose a Suspicious Activity Report to controlling
companies whether domestic or foreign.
The guidance notes that banking organizations should maintain appropriate arrangements for the
protection of confidentiality of Suspicious Activity Reports.
FinCEN has concurrently issued similar guidance for securities broker-dealers, futures
commission merchants, and introducing brokers in commodities.

For additional copies, bankers and others are encouraged to use one of the following toll-free numbers in contacting the Federal
Reserve Bank of Dallas: Dallas Office (800) 333-4460; El Paso Branch Intrastate (800) 592-1631, Interstate (800) 351-1012;
Houston Branch Intrastate (800) 392-4162, Interstate (800) 221-0363; San Antonio Branch Intrastate (800) 292-5810.

-2ATTACHMENTS
Copies of the Board’s SR letter 06-1 dated January 20, 2006, the interagency guidance, and
FinCEN’s guidance are attached.
MORE INFORMATION
For more information, please contact Gary Krumm, Banking Supervision Department,
(214) 922-6218. Previous Federal Reserve Bank notices are available on our web site at
www.dallasfed.org/banking/notices/index.html or by contacting the Public Affairs Department
at (214) 922-5254.

BOARD OF GOVERNORS
OF THE

FEDERAL RESERVE SYSTEM
WASHINGTON, D. C. 20551

DIVISION OF BANKING
SUPERVISION AND
REGULATION

SR 06-1
January 20, 2006
TO THE OFFICER IN CHARGE OF SUPERVISION AND
APPROPRIATE SUPERVISORY EXAMINATION STAFF AT
EACH FEDERAL RESERVE BANK, AND TO EACH
DOMESTIC AND FOREIGN BANKING ORGANIZATION
SUPERVISED BY THE FEDERAL RESERVE
SUBJECT: Interagency Guidance on Sharing Suspicious Activity Reports with Head Offices and
Controlling Companies
The U.S. Department of the Treasury's Financial Crimes Enforcement
Network (FinCEN), along with the Board of Governors of the Federal Reserve System,
Federal Deposit Insurance Corporation, Office of the Comptroller of the Currency, and Office
of Thrift Supervision, has issued the attached interagency guidance for banking organizations
on sharing Suspicious Activity Reports with head offices and controlling companies (as
defined in the guidance). The guidance confirms that: (1) a U.S. branch or agency of a
foreign bank may disclose a Suspicious Activity Report to its head office outside the United
States; and (2) a U.S. depository institution may disclose a Suspicious Activity Report to
controlling companies whether domestic or foreign. The guidance notes that banking
organizations should maintain appropriate arrangements for the protection of confidentiality of
Suspicious Activity Reports.
The guidance does not address whether a banking organization may share a
Suspicious Activity Report with an affiliate other than a controlling company or head office,
whether located inside the United States or abroad. Until further guidance is issued, banking
organizations should not share Suspicious Activity Reports with such affiliates.
FinCEN has concurrently issued similar guidance (also attached) for securities
broker-dealers, futures commission merchants, and introducing brokers in commodities.
This SR letter should be distributed to the appropriate management and
compliance personnel at the domestic and foreign banking organizations supervised by the
Federal Reserve, and Reserve Banks should distribute this SR letter to supervisory and
examination staff. If you have any questions, please contact Nina A. Nichols, Assistant
Director, at (202) 452-2961, or Bridget M. Neill, Assistant Director, at (202) 452-5235.

1 of 2

Richard Spillenkothen
Director

Attachments:

Interagency Guidance on Sharing Suspicious Activity
Reports with Head Offices and Controlling Companie
Financial Crimes Enforcement Network
Board of Governors of the Federal Reserve System
Federal Deposit Insurance Corporation
Office of the Comptroller of the Currency
Office of Thrift Supervision

Guidance on Sharing of Suspicious Activity Reports by
Securities Broker-Dealers, Futures Commission
Merchants, and Introducing Brokers in Commodities
Financial Crimes Enforcement Network

2 of 2

Financial Crimes Enforcement Network
Board of Governors of the Federal Reserve System
Federal Deposit Insurance Corporation
Office of the Comptroller of the Currency
Office of Thrift Supervision
January 20, 2006
Interagency Guidance on Sharing Suspicious Activity Reports with Head Offices and
Controlling Companies
The Financial Crimes Enforcement Network, along with the Board of Governors of the
Federal Reserve System, the Federal Deposit Insurance Corporation, the Office of the
Comptroller of the Currency, and the Office of Thrift Supervision (collectively, the
“Federal Banking Agencies”) is issuing this guidance to confirm that under the Bank
Secrecy Act and its implementing regulations (and parallel provisions issued by the
Federal Banking Agencies): (1) a U.S. branch or agency of a foreign bank may disclose a
Suspicious Activity Report to its head office outside the United States; and (2) a U.S.
bank or savings association (“depository institution”) may disclose a Suspicious Activity
1]
Report to controllingcompanies[SeeFootnote whether domestic or foreign. This guidance does not
address the applicability of any other Federal or state laws.
The Bank Secrecy Act prohibits the filer of a Suspicious Activity Report from notifying
any person involved in the suspicious transaction that the transaction has beenreported.[SeeFootnote2]
Implementing regulations issued by the Financial Crimes Enforcement Network have
construed this confidentiality provision as generally prohibiting a banking organization
from disclosing the existence of a Suspicious Activity Report except where such
disclosure is requested by appropriate law enforcement agencies, bank supervisory
3]
agencies, or the Financial Crimes EnforcementNetwork.[SeeFootnote In addition, the Federal
Banking Agencies’ regulations, issued pursuant to Title 12 of the United States Code,
state that “Suspicious activity reports areconfidential.”[SeeFootnote4]
A depository institution that files a Suspicious Activity Report may disclose to entities
within its organization information underlying the filing (that is, information about the
Footnote 1

--A controlling company is defined as:
a) a bank holding company, as defined in Section 2 of the Bank Holding Company Act;
b) a savings and loan holding company, as defined in Section 10(a) of the Home Owners’ Loan
Act.
For purposes of this guidance, a controlling company also includes a company having the power directly or
indirectly, to direct the management or policies of an industrial loan company or a parent company or to
vote 25% or more of any class of voting shares of an industrial loan company or a parent company.[EndofFootnote1]
Footnote 2--See 31 U.S.C. 5318(g)(2) and 31 C.F.R. § 103.18(e).[EndofFootnote2]
Footnote 3--See 31 C.F.R. § 103.18(e).[EndofFootnote3]
Footnote 4
--See 12 C.F.R. § 353.3(g) [Federal Deposit Insurance Corporation]; 12 C.F.R. § 208.62(j) [Board of
Governors of the Federal Reserve System]; 12 C.F.R. § 21.11(k) [Office of the Comptroller of the
Currency]; 12. C.F.R. § 563.180(b)(12) [Office of Thrift Supervision].[EndofFootnote4]

1

customer/suspect and transaction(s) reported). However, neither the Financial Crimes
Enforcement Network nor the Federal Banking Agencies have taken a definitive position
concerning whether a depository institution is permitted under the Bank Secrecy Act and
Federal Banking Agency regulations to share or disclose to entities within its corporate
structure, the Suspicious Activity Report itself or the fact that a Suspicious Activity
Report wasfiled.[SeeFootnot5]The answer to this question has become a critical issue, particularly
e
in a global context.
We have carefully considered this issue, taking into account the need for a head office,
controlling entity or party to discharge its oversight responsibilities with respect to
enterprise-wide risk management and compliance with applicable laws and regulations.
To fulfill those responsibilities, head offices and controlling entities or parties may have a
valid need to review a branch’s, office’s, or depository institution’s compliance with legal
requirements to identify and report suspicious activity. Accordingly, we have determined
that a U.S. branch or agency of a foreign bank may share a Suspicious Activity Report
with its head office outside the United States for these purposes. Similarly, a U.S. bank
or savings association may disclose a Suspicious Activity Report to its controlling
company, no matter where the entity or party is located. In the event that a depository
institution’s corporate structure includes multiple controlling companies, the filing
institution’s Suspicious Activity Report may be shared with each controllingentity.[SeeFootnote6]
There may be circumstances under which a depository institution would be liable for
direct or indirect disclosure by its controlling company or head office of a Suspicious
Activity Report or the fact that a Suspicious Activity Report was filed. Therefore, the
depository institution, as part of its anti-money laundering program, must have written
confidentiality agreements or arrangements in place specifying that the head office or
controlling company must protect the confidentiality of the Suspicious Activity Reports
through appropriate internal controls.
The sharing of a Suspicious Activity Report with a non-U.S. entity raises additional
concerns about the ability of the foreign entity to protect the Suspicious Activity Report
in light of possible requests for disclosure abroad that may be subject to foreign law.
These concerns will need to be addressed in the confidentiality agreements or
arrangements. The recipient head office, controlling entities or parties may not disclose
further any Suspicious Activity Report, or the fact that such report has been filed;
however, the institution may disclose without permission underlying information (that is,
information about the customer and transaction(s) reported) that does not explicitly reveal

Footnote 5

--However, the Federal Banking Agencies’ regulations require notification of the filing of Suspicious
Activity Reports to boards of directors, whether domestic or global. See 12 C.F.R. § 353.3(f) [Federal
Deposit Insurance Corporation]; 12. C.F.R. § 208.62(h) [Board of Governors of the Federal Reserve
System]; 12 C.F.R. § 21.11(h) [Office of the Comptroller of the Currency]; 12 C.F.R. § 563.180(b)(9)
[Office of Thrift Supervision].[EndofFootnote5]
Footnote 6
--It should be noted that the requirement that knowledge of a Suspicious Activity Report’s filing may not
be disclosed to the controlling entity or party remains, even under this guidance, if there is a reason to
believe it may be disclosed to any person involved in the suspicious activity that is the subject of the
Suspicious Activity Report.[EndofFootnote6]

2

that a Suspicious Activity Report was filed and that is not otherwise subject to disclosure
restrictions.
The Financial Crimes Enforcement Network and the Federal Banking Agencies are
considering whether a depository institution may share a Suspicious Activity Report with
an affiliate other than a controlling company or head office, both in instances where the
affiliate is located inside the United States and where the affiliate is located abroad. We
expect to issue guidance on this issue shortly; but, until such time, depository institutions
should not share Suspicious Activity Reports with such affiliates.

3

Financial Crimes Enforcement Network
January 20, 2006
Guidance on Sharing of Suspicious Activity Reports by Securities Broker-Dealers,
Futures Commission Merchants, and Introducing Brokers in Commodities
The Financial Crimes Enforcement Network, after consulting with staff of the U.S.
Securities and Exchange Commission and the Commodity Futures Trading Commission,
is issuing this guidance to confirm that, under the Bank Secrecy Act and its implementing
regulations, securities broker-dealers, futures commission merchants, and introducing
brokers in commodities may share Suspicious Activity Reports with parent entities, both
domestic and foreign. This guidance does not address the applicability of any other
Federal or state laws.
The Bank Secrecy Act prohibits the filer of a Suspicious Activity Report from notifying
any person involved in the suspicious transaction that the transaction has been
reported.[See
construed this confidentiality provision as generally prohibiting a securities brokerdealer, futures commission merchant, or introducing broker in commodities from
disclosing the existence of a Suspicious Activity Report, except where such disclosure is
requested by appropriate law enforcement agencies, securities and futures industry
regulatory agencies or self-regulatory organizations, or the Financial Crimes Enforcement
Network.
A securities broker-dealer, futures commission merchant, or introducing broker in
commodities that files a Suspicious Activity Report may disclose to entities within its
organization information underlying the filing (that is, information about the
customer/suspect and the transaction(s) reported). However, the Financial Crimes
Enforcement Network has not taken a definitive position concerning whether a securities
broker-dealer, futures commission merchant, or introducing broker in commodities is
permitted under the Bank Secrecy Act to share or disclose to entities within its larger
corporate structure, the Suspicious Activity Report itself or the fact that a Suspicious
Activity Report was filed. The answer to this question has become a critical issue,
particularly in a global context.
We have considered this issue carefully, taking into account the need for a parent entity
to discharge its oversight responsibilities with respect to enterprise-wide risk
management and compliance with applicable laws and regulations. To fulfill those
responsibilities, parent entities may have a valid need to review compliance by a
securities broker-dealer, futures commission merchant, or introducing broker in
commodities which has legal requirements to identify and report suspicious activity.
Accordingly, we have determined that a securities broker-dealer, futures commission
merchant, or introducing broker in commodities may share a Suspicious Activity Report
with parent entities, both domestic and foreign, for these purposes. In the event that the
Footnote 1--

See 31 U.S.C. § 5318(g)(2) and 31 C.F.R. §§ 103.17(e) and 103.19(e).[EndofFootnote1]

Footnote

corporate structure of a securities broker-dealer, futures commission merchant, or
introducing broker in commodities includes multiple parent entities, the filing
institution’s Suspicious Activity Report may be shared with each entity in the chain of
control.
There may be circumstances under which a securities broker-dealer, futures commission
merchant, or introducing broker in commodities would be liable for direct or indirect
disclosure of a Suspicious Activity Report by a recipient parent entity, or the fact that a
Suspicious Activity Report had been filed. Therefore, the securities broker-dealer,
futures commission merchant, or introducing broker in commodities, as part of its antimoney laundering program, must have written confidentiality agreements or
arrangements in place specifying that the parent entity (or entities) must protect the
confidentiality of the Suspicious Activity Reports through appropriate internal controls.
The sharing of a Suspicious Activity Report with a non-U.S. entity raises additional
concerns about the ability of the foreign entity to protect the Suspicious Activity Report
in light of possible requests for disclosure abroad that may be subject to foreign law.
These concerns will need to be addressed in the confidentiality agreements or
arrangements. The recipient foreign parent entity (or entities) may not disclose further
any Suspicious Activity Report, or the fact that such report has been filed; however, the
foreign parent entity (or entities) may disclose without permission underlying information
(that is, information about the customer and transaction(s) reported) that does not
explicitly reveal that a Suspicious Activity Report was filed and that is not otherwise
subject to disclosure restrictions.
The Financial Crimes Enforcement Network, in consultation with staff from the
Securities and Exchange Commission and the Commodity Futures Trading Commission,
is considering whether a securities broker-dealer, futures commission merchant, or
introducing broker in commodities may share a Suspicious Activity Report with an
affiliate other than its parent entities, both in instances where the affiliate is located inside
the United States and where the affiliate is located abroad. We expect to issue guidance
on this issue shortly; but, until such time, securities broker-dealers, futures commission
merchants, and introducing brokers in commodities should not share Suspicious Activity
Reports with non-parent entities.

2


Federal Reserve Bank of St. Louis, One Federal Reserve Bank Plaza, St. Louis, MO 63102