Customer Identification Program Requirements

Member Advisory

September 18, 2003

Customer Identification Program Requirements

On May 9, 2003, the Department of Treasury, through the Financial Crimes Enforcement Network, and the Commodity Futures Trading Commission issued a final joint rule requiring FCMs and IBs to adopt a Customer Identification Program (CIP) as part of their Anti-Money Laundering Compliance Program. Among other things, a firm's CIP must include procedures relating to: obtaining required identifying information and verifying identity to the extent reasonable and practicable; recordkeeping; comparison with Government lists; customer notice and, if applicable, reliance on other financial institutions. Firms are reminded that they should be in full compliance with this rule by October 1, 2003. A copy of the final rule can be found at http://www.fincen.gov/326fcmfinal.pdf.

NFA has updated NFA Compliance Rule 2-9 and its Interpretive Notice entitled "FCM and IB Anti-Money Laundering Program" to incorporate these new requirements and to provide guidance on compliance. We have submitted the proposal to both the CFTC and Treasury for comment and will formally submit the Rule and Notice to the CFTC for approval in the very near future.

NFA recognizes that its FCM and IB Members face a significant challenge in implementing a CIP by the statutory mandated date and that the program will be refined through time. NFA staff is available to assist FCM and IB Members with questions regarding their CIP program.

If you have any questions on the CIP requirements, please contact Carol Wooding, Assistant General Counsel, at (312)781-1409 or Sharon Pendleton, Associate Director, Compliance, at (312)658-6540.

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