Regulatory Alerts2008-03-04
Added
Customer Identification Program Rule No-Action Position Respecting Broker-Dealers Operating Under Fully Disclosed Clearing Agreements According to Certain Functional Allocations
FinCEN will take no action against a clearing firm for failing to comply with the Customer Identification Program rule regarding introduced customers when the introducing firm exclusively retains the functions of opening and approving customer accounts and directly receiving and accepting orders. This no-action position also extends to piggybacking arrangements where the piggybacking firm retains these specific functions through an introducing firm. Despite this relief from CIP rule obligations, clearing and introducing firms must maintain risk-based anti-money laundering policies and controls to assess, monitor, and mitigate money laundering risks associated with these arrangements.
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