Regulatory Alerts2024-03-15
FinCEN Administrative Ruling on Customer Identification and Due Diligence for IRA Beneficiaries
The Financial Crimes Enforcement Network issued an administrative ruling clarifying that broker-dealers must comply with Customer Identification Program and Customer Due Diligence requirements when a designated beneficiary opens a new account to receive inherited Individual Retirement Account funds. For nonprofit legal entity beneficiaries, this obligation includes verifying the identity of the organization and collecting specific information about a single individual with significant responsibility to control or manage the entity. The ruling confirms these identity verification duties apply regardless of the charitable nature of the distribution, provided a new formal account relationship is established with the broker-dealer.
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