WHEN OPENING A NEW ACCOUNT FOR A CUSTOMER, FIRST OBTAIN IMPORTANT INFORMATION ABOUT THAT CUSTOMER
Okay, so you are becoming licensed as a securities representative. Before you may open a new account, you must first obtain important information about that customer. This gathering of information is required by the U.S. Patriot Act to prevent criminal money laundering and/or tax avoidance. In accord with the Patriot Act, the U.S. Treasury and the SEC have established a Customer Identification Program (CIP) that controls brokers when opening new accounts. FINRA's Content Outline for the Securities Industry Essentials (SIE) Exam includes customer screening and Customer Identification Program in the Rules following Section 3.3.3. Consequently, SIE candidates should expect to see questions on these topics on the test and should prepare for them. Bob Eder covers these rules in detail in his Study for the Securities Industry Essentials (SIE) Exam . Here is a sample of Bob Eder's treatment: "Non-Documentary Verification "A broker/dealer, such as Ajax, may use non-documen...