Regulatory Alerts2019-07-22
Guidance on the Application of the Customer Identification Program Rule and the Beneficial Ownership Rule to Certain Introducing Brokers
The Financial Crimes Enforcement Network issued interpretive guidance clarifying that Introducing Brokers who do not introduce accounts to Futures Commission Merchants have no obligations under the Customer Identification Program or Beneficial Ownership Rules. This determination arises because such entities lack customers or accounts as defined by the regulations, thereby exempting them from requirements to verify identities or maintain written compliance procedures. The guidance explicitly states that it does not establish new regulatory expectations but rather clarifies existing obligations for this specific subset of commodity brokers.
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