Customer Identification Program (CIP): Common Questions – Part II

[Continued from Customer Identification Program (CIP): Common Questions – Part I]

What Is A “Reasonable Time” To Verify Customers’ Identities?

A customer’s identity must be verified within a “reasonable time” before or after the customer’s account is opened. The rule does not specify what counts as a “reasonable time,” and the Adopting Release for the Broker-Dealer CIP Rule emphasizes that broker-dealers must be reasonably flexible when undertaking such verification. The broker-dealer must be able to undertake verification before or after an account if opened, as the amount of time needed may depend on various factors, which is part of the firm’s risk assessment.  A firm’s CIP procedures must enable the broker-dealer to form a reasonable belief that it knows the true identity of each customer. Read More…

RegTech: Regulatory Intelligence & Risk Management and Assessment

This blog post is the third and final entry in our series on the five major areas of Regulatory Technology (RegTech) tools as determined by FINRA: surveillance and monitoring, customer identification and anti-money laundering (AML) compliance, regulatory intelligence, reporting and risk management, and investor risk assessment. If you missed our previous entries on how the financial services industry is using RegTech tools to keep up with their regulatory compliance requirements, they can be found at “RegTech: Surveillance and Monitoring” and “RegTech: Customer Identification and AML Compliance”. Our final entry will address the areas of regulatory intelligence, reporting and risk management, and investor risk assessment. Read More…