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Foreign exchange reports are a common way for banks to identify transactions that may not have been reported to the CFTC.
But in recent years, banks have begun to use a much broader set of criteria for determining if a foreign currency transaction is suspicious, including whether the transaction was part of a trade, as well as the bank’s ability to provide documentation to confirm that the transaction occurred.
In the past, a CFTC official would have relied on the report’s summary to rule on the accuracy of the transaction.
But the CFCC has been moving to broaden the scope of the report and make it more comprehensive.
The new rule requires a report that includes at least one transaction that the bank determines “was part of an international wire transfer, a cash payment or other financial transaction.”
The report must also include the bank owner’s name, address and contact information.
Banks are still allowed to use other criteria to determine whether a transaction is legitimate, such as whether it’s a cashier’s check or a check made by a bank, or if it was a payment made from an account that the customer has opened.
The report also must include the name and address of the person or entities who provided the money.
It also must state whether the bank is required to report the transaction to the authorities, and if so, the date that the information was received.
Banks can use the same criteria to assess whether a foreign transaction is “in compliance with the Foreign Exchange Reporting Act.”
However, the report is still subject to privacy restrictions and must be reviewed by a supervisor before being approved.
The Treasury Department has said the new rule will improve transparency and prevent money laundering.
Bank executives, including the chairman of the Federal Reserve Bank of New York, said the change was a way to “reduce the complexity of reporting transactions, and give customers confidence in the accuracy and completeness of information provided by our financial institutions.”
The Treasury said it had worked closely with the CFIA and CFTC to develop this rule and that it hoped to begin the rule taking effect in early March.
The change comes amid growing concern that the Federal Deposit Insurance Corporation has been losing trust with its customers and regulators.
In May, the Federal Housing Finance Agency (FHFA) announced that it was considering ending its long-standing policy of requiring all FDIC-insured banks to submit daily reports on their foreign exchange transactions to the agency.
The bank holding company that manages the FDIC insured bank deposits, the FDICS, was not included in the FHFA’s proposal to end the requirement.
The move to make foreign exchange reports more detailed was welcomed by financial services industry groups.
“This is a step in the right direction,” said Michael J. Belsky, president of the Financial Services Roundtable, which represents big banks and investment firms.
The group also supports expanding the definition of “financial transaction,” as well.
The proposal to expand the reporting requirement was supported by the CFSC, the U.S. Chamber of Commerce, and the Federal Home Loan Mortgage Corporation.
The Financial Industry Regulatory Authority (FINRA), which regulates the banking industry, did not immediately respond to a request for comment.
The Federal Reserve’s announcement is one of many steps the bank has taken to increase transparency in the foreign exchange reporting process, which has come under increasing scrutiny as regulators have expanded the CFSA’s mandate.
The move came a day after the Federal Bureau of Investigation released its annual report on foreign exchange markets.
Last month, the Office of the Comptroller of the Currency announced that the U
