Proposed regulations impose new certification requirements that could result in personal liability for compliance officers of financial institutions.

On December 1, 2015, the New York State Department of Financial Services (NYSDFS), the agency that regulates the financial services and insurance industries in New York, released a proposed regulation requiring financial institutions, including banks and other financial firms, to maintain enhanced Bank Secrecy Act/Anti-Money Laundering (BSA/AML) and Office of Foreign Asset Control (OFAC) monitoring and reporting programs (the Proposed Rule). In addition, the Proposed Rule requires the chief compliance officer (or functional equivalent) of such institutions to make an annual certification attesting to the full compliance of BSA/AML and OFAC monitoring and filtering programs with the Proposed Rule’s requirements. The certification requirement is supported by potential criminal penalties targeted at the certifying officers. The Proposed Rule, which was published in the New York State Register on December 16, 2015, is open to a 45-day notice and public comment period that will end on February 1, 2016, after which a final rule will be issued.