MutualFundWire.com
The insiders' edge for 40 Act industry executives!
an InvestmentWires' Publication
an InvestmentWires' Publication
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MutualFundWire.com
The insiders' edge for 40 Act industry executives!
an InvestmentWires' Publication |
|
Friday, March 19, 2004 Brokers Have to Know Thier Clients The Securities Industry Association, Investment Counsel Association of America and Financial Planning Association issued a joint statement yesterday to clarify a customer identification rule under the USA Patriot Act of 2001. In 2003, the SEC and Treasury Department issued a rule under the Act requiring broker-dealers to adopt a written Customer Identification Program (CIP) with procedures for verifying and documenting customer identity, providing customers with notice that this is happening and determining if customers appear on designated terrorist lists. The rule allowed broker-dealers to rely on other financial institutions to perform the CIP tasks, as long as those institutions were subject to certain anti-money laundering regulations. Since investment advisors were not subject to the specified rules, broker-dealers weren’t allowed to rely on advisers for CIP verification. This is no longer the case. The SEC issued a No Action letter on February 12, 2004 allowing broker-dealers to rely on investment advisers for CIP verification until the rules governing advisers are finalized. "Because investment advisers and broker-dealers often work together in providing services to the investing public, coordination of broker-dealers and investment advisers is helpful in broker-dealers’ effective implementation of the customer identification rule," the industry groups’ statement said. Printed from: MFWire.com/story.asp?s=6859 Copyright 2004, InvestmentWires, Inc. All Rights Reserved |