Do I Still Need an AML Compliance Program for My Fund?

You spent 2025 building an AML program for your fund.

Then the deadline moved.

On August 5, 2026, FinCEN confirmed that the Investment Adviser AML/CFT Program and SAR Filing Rule will not take effect until January 1, 2028. This is the second delay in seven months.

So should you stop your AML work?

Not exactly.

FinCEN has delayed the rule, but it has not eliminated it. The agency has also indicated that it plans to return with a “re-tailored” version before 2028.

For fund managers, the challenge is finding the right middle ground: do enough now to maintain sensible investor diligence without spending heavily on a compliance program that may change before it becomes mandatory.

What Actually Changed on August 5?

FinCEN issued exemptive relief confirming that the rule’s effective date has moved to January 1, 2028. This follows the agency’s July 21, 2026 postponement announcement.

For now:

• The original AML/KYC requirements under this rule are not in effect.
• FinCEN plans to issue a re-tailored version before 2028.
• The agency has not yet explained exactly what the revised requirements will contain.

That uncertainty is important.

You should not assume that the current rule will simply take effect unchanged in 2028.

A Delay Does Not Mean the Rule Is Dead

The biggest mistake would be treating the postponement as a repeal.

It is not.

FinCEN has retained the underlying statutory authority and has stated its intention to regulate this area.

That means shutting down your AML and KYC processes completely could create problems later.

If FinCEN releases a revised rule with a shorter implementation period, a fund that abandoned its compliance work may have to rebuild quickly.

There is also a practical reason to maintain core diligence regardless of the rule.

Knowing who your investors are and identifying suspicious activity can protect a fund from bad actors even when a particular regulatory requirement is not yet mandatory.

First Determine Whether Your Fund Is Covered

Not every venture capital or private equity manager will have the same obligations.

Coverage depends on factors including registration status and assets under management (AUM).

This can become particularly confusing for emerging managers.

A fund may change its registration status or grow its AUM over time, potentially changing its regulatory position.

Some SEC-registered advisers may assume they are exempt when they are not.

Others, including certain state-registered or exempt reporting advisers, may assume the rule applies to them when it does not.

Do not make either assumption without checking the facts.

Your current registration status and AUM should be reviewed against the applicable criteria.

Don’t Build Everything to the Old Rule

There is another trap on the opposite side.

You might decide to continue building your entire compliance program exactly according to the original rule.

That can also be inefficient.

FinCEN has already signaled that a re-tailored version is coming.

If you spend heavily implementing every detail of a framework that may be rewritten, some of that work could become unnecessary.

A better approach is to separate essential compliance practices from provisions that depend specifically on the final regulatory framework.

Keep your core investor diligence running.

Avoid locking your entire compliance budget into requirements that may change.

Common Founder Mistakes

• Treating the delay as a full stop: Abandoning AML and KYC diligence entirely leaves the fund unprepared if FinCEN introduces the revised rule on a compressed timeline.
• Failing to confirm actual coverage: Assuming your fund is either covered or exempt without checking current AUM and registration status can lead to unnecessary spending or a genuine compliance gap.
• Building everything to the original rule: Spending heavily on a rigid program ignores FinCEN’s indication that the framework will be re-tailored. Flexible compliance work is more practical while the final requirements remain uncertain.

10-Minute AML Self-Check

Before finalizing your fund’s compliance budget for the next two years, ask:

• Have we confirmed whether our fund is currently a “covered adviser” based on our AUM and registration status?
• Are we continuing core AML/KYC investor diligence despite the postponement?
• Could we respond quickly if FinCEN’s revised rule arrives with less than a year of implementation time?
• Have we separated compliance work that is useful now from requirements that should wait for the revised rule?
• Is someone on our team actively tracking FinCEN’s announcements and rulemaking?

If you cannot answer yes to all five, your fund may be exposed to the next regulatory change rather than prepared for it.

Bottom Line

Two delays in seven months do not mean the Investment Adviser AML/CFT rule is disappearing.

They indicate that FinCEN is still deciding how it wants to regulate investment advisers and is preparing a revised approach.

For fund managers, the sensible approach is neither to ignore AML compliance nor to spend heavily building a system around rules that may soon change.

Not Sure If Your Fund Is Actually Covered by This Rule?

Schedule a free 30-minute call with our team to discuss your fund’s registration status, AUM, AML/KYC obligations, and how to prepare for FinCEN’s revised framework.

Book here: Initial Consultation with Primum Law Group