Investments without AML
Two major changes have recently been added to how FundAmerica’s technology platform handles AML. Managing AML is now optional in most cases which means a few things:
- The processes and fees for the AML process can now be disabled.
- Tax ID numbers (Social Security, EINs, Social Insurance, etc.) are now optional when creating new investors.
There are two primary situations for handling this: your platform has its own system for managing AML, background checks, etc. or AML is not required for the collection of funds in escrow for your offering—which is obviously a conversation for you and your securities attorney and not FundAmerica’s engineering team!
For InvestNow customers, you can select whether or not to process AML checks on a per offering basis (i.e. it’s all or nothing) in the offering wizard:
If “AML check investors” is not checked, AML will not be processed for any investors in the offerings. Furthermore, tax ID numbers will not be requested and substitute W-9 questions will not be be asked to your investors.
AML checks are managed on a per investment basis for API customers, which means you can process AML for some investors but not for others. A common use case is using FundAmerica’s service for US-based investors but having your own system in place for non-US investors. All that is required is to pass a new parameter to the investments API when creating a new investment:
That’s it. The AML process will not be in effect related to funds for that particular investment.
Furthermore, investors without tax ID numbers can invest in these instances. This is important to note for platforms who have investors participating in multiple offerings that may or may not require AML. You may have to add additional steps to your investment process to collect missing data before a new investment can be submitted by an investor without the necessary information on file. Otherwise, I might end up seeing this on your next 422:
"aml_check_investor":"has no tax ID number associated which is required for AML checks"
While this is a pretty dramatic system change for us, the implementation for you is pretty darn simple.