When new rule proposals are issued that impact the private funds industry, managers typically begrudgingly accept that certain provisions will survive to the final version while also praying that others fail to proceed. Such is the case with the proposed rules (Proposal) recently issued by the Financial Crimes Enforcement Network (FinCEN) setting forth new anti-money laundering/countering the financing of terrorism requirements. SEC-registered investment advisers (RIAs) should expect the rules to be adopted in some form, which will result in another sizable lift for their already overwhelmed compliance departments. Other classes of fund managers – e.g., exempt reporting advisers (ERAs) and non‑U.S. advisers subject to the Investment Advisers Act of 1940 – will simultaneously be hoping FinCEN narrows the scope of the final rules to exclude them when various changes are made. This second article in a two-part series identifies elements of the Proposal that will be challenging for fund managers to satisfy, how it could impact future SEC examination efforts, which components are unlikely to be included in the final rules and tips for how managers can prepare. The first article described the requirements set forth in the Proposal and FinCEN’s justification for extending the scope to RIAs, ERAs and non‑U.S. advisers. See “FBI Sees Significant Risk That Private Funds Are Exploited for Money Laundering” (Dec. 15, 2020).