apply the requirements of the BSA with regards to investment companies. This report was submitted to Congress on December 31, 2001. It gives a background to money laundering and how the BSA and Anti-Money Laundering Act (AML) was developed to counter increasingly sophisticated money laundering schemes and gives an overview of the general process criminals use to undertake money laundering, and how they use investment companies in each stage of the process. In order for effective regulations to apply to the BSA, the report acknowledges that different types of investment companies have different susceptibilities to money laundering and thus regulations must deal with them differently. The report firstly defines what is meant by the term "investment companies". It defines an investment company as being either registered or unregistered. For registered investment companies, it found that mutual funds are the most susceptible to money laundering because money launders can get easy access to their money. The report found closed-end funds and interval funds were not as susceptible because investors must go through broker-dealer or banks, which are subject to anti-money laundering regulations already. The report also similarly found that unit investment trusts (UITs) to be of low risk of being used for money-laundering purposes. For unregistered investment companies, the report found that hedge funds to be the most vulnerable to money laundering. This was because of the relatively high liquidity of their structure and interests. Hedge funds have relatively short periods where money is kept locked up, and a hedge fund's structure makes them vulnerable because domestic hedge funds do not need to identify the source of their funding, and offshore hedge fund structures are complex and more likely to allow "anonymous" investments. The report notes that commodity pools are highly regulated and that private equity funds and venture capital funds are long term investments that provide little opportunity to redeem their investments. The report also noted that Real Estate Investment Trust (REITs) investments "[tend] to be illiquid because the investors have no right to redeem their interests and the REIT often restricts the transfer of interests to comply with other [Internal Revenue Code] requirements". The report makes a proposed rule which would apply the BSA to unregistered investment companies (67 CFR 21117 temporarily excluded unregistered companies from the requirements of the BSA). It was acknowledged in the report that listing all types of unregistered investment companies would, unnecessarily burden businesses