Customer Identification Programs for Futures Commission Merchants and Introducing Brokers

customer before an account is opened or a customer is granted authority to effect transactions with respect to an account. The specified information must include, at a minimum:
(i) Name;
(ii) Date of birth, for a natural person; (iii) Addresses:
(A) Residence and mailing (if different) for a natural person; or (B) Principal place of business and mailing (if different) for a person other than a natural person; and (iv) Identification numbers:
(A) A taxpayer identification number from each customer that is a U.S. person; or (B) A taxpayer identification number, passport number and country of issuance, alien identification card number, or number and country of issuance of any other government￾issued document evidencing nationality or residence and bearing a photograph or similar safeguard from each customer that is not a U.S. person. (2) Limited exception. In the case of a person other than a natural person that has applied for, but has not received, an employer identification number, the CIP may allow such information to be provided within a reasonable period of time after the account is established, if the mutual fund obtains a copy of the application for the employer identification number prior to such time. (d) Required verification procedures. The CIP shall include procedures for verifying the identity of customers, to the extent reasonable and practicable, using information obtained pursuant to paragraph (c) of this section. Such verification must occur within a reasonable time before or after the customer’s account is opened or the customer is granted authority to effect transactions with respect to an account:
(1) Verification through documents. The CIP must describe when the mutual fund will verify customers’ identities through documents and describe the documents that the mutual fund will use for this purpose. Suitable documents for verification may include:
(i) For natural persons, unexpired government-issued identification evidencing nationality or residence and bearing a photograph or similar safeguard; and (ii) For persons other than natural persons, documents showing the existence of the entity, such as registered articles of incorporation, a government-issued business license, partnership agreement, or trust instrument. (2) Verification through non￾documentary methods. The CIP must describe non-documentary methods a mutual fund will use to verify customers’ identities and when these methods will be used in addition to, or instead of, relying on documents. Non￾documentary verification methods may include contacting a customer; independently verifying information through credit bureaus, public databases, or other sources; and checking references with other financial institutions. Non-documentary methods shall be used when a customer who is a natural person is unable to present an unexpired, government-issued identification document that bears a photograph or similar safeguard; the mutual fund is presented with unfamiliar documents to verify the identity of a customer; or the mutual fund does not obtain documents to verify the identity of a customer, does not meet face-to-face a customer who is a natural person, or is otherwise presented with circumstances that increase the risk the mutual fund will be unable to verify the true identity of a customer through documents. (e) Government lists. The CIP shall include procedures for determining whether a customer’s name appears on any list of known or suspected terrorists or terrorist organizations prepared by any federal government agency and made available to the mutual fund. Mutual funds shall follow all federal directives issued in connection with such lists. (f) Customer notice. The CIP shall include procedures for providing customers with adequate notice that the mutual fund is requesting information to verify the customer’s identity. (g) Lack of verification. The CIP shall include procedures for responding to circumstances in which the mutual fund cannot form a reasonable belief that it knows the true identity of a customer. (h) Recordkeeping. The CIP shall include procedures for maintaining a record of all information obtained pursuant to the CIP. A mutual fund must retain all records made or obtained when verifying the identity of a customer pursuant to its CIP until five years after the date the account of the customer is closed. Records subject to the requirements in this paragraph (h) include:
(1) All identifying information provided by a customer pursuant to paragraph (c) of this section, and copies of any documents that were relied on pursuant to paragraph (d)(1) of this
section evidencing the type of document
and any identification number it may contain; (2) The methods and results of any measures undertaken to verify the identity of a customer pursuant to paragraph (d)(2) of this section; and (3) The resolution of any discrepancy in the identifying information obtained. (i) Approval by the board. The CIP shall be approved by the mutual fund’s board of directors or trustees. (j) Exemptions. The Commission, with the concurrence of the Secretary, may by order or regulation exempt any mutual fund or type of account from the requirements of this section. The Commission and the Secretary shall consider whether the exemption is consistent with the purposes of the Bank Secrecy Act (31 U.S.C. 5311 et seq.) and in the public interest, and may consider other necessary and appropriate factors. Dated: July 15, 2002. James F. Sloan, Director, Financial Crimes Enforcement Network. Dated: July 12, 2002. By the Securities and Exchange Commission. Margaret H. McFarland, Deputy Secretary. [FR Doc. 02–18194 Filed 7–22–02; 8:45 am] BILLING CODE 4810–02–P COMMODITY FUTURES TRADING COMMISSION 17 CFR Part 1 RIN 3038–AB90 DEPARTMENT OF THE TREASURY 31 CFR Part 103 RIN 1506–AA34 Customer Identification Programs for Futures Commission Merchants and Introducing Brokers AGENCIES: Financial Crimes Enforcement Network, Treasury; United States Commodity Futures Trading Commission. ACTION: Joint notice of proposed rulemaking. SUMMARY: Treasury, through the Financial Crimes Enforcement Network (FinCEN), and the United States Commodity Futures Trading Commission (CFTC or Commission) are jointly issuing a proposed regulation to implement section 326 of the Uniting and Strengthening America by Providing Appropriate Tools Required to Intercept and Obstruct Terrorism (USA PATRIOT) Act of 2001 (the Act).
Section 326 of the Act requires Treasury
to jointly prescribe with the CFTC a regulation that, at a minimum, requires