Patriot Act - Customer Indentification Program

[Guest terryh123]

Is there an exemption from CIP rules for brokerage accounts established for an ERISA plan, just as there is for accounts established for an ERISA plan at banks, savings associations, credit unions and mutual funds? My clients keep getting requests from brokerage firms for CIP information for 401(k) plans with inidividuals as trustees.

[Appleby]

The rules are the same for brokerage firms.

ERISA plans are not subject to the CIP rules

[Demosthenes]

Although, as a matter of policy, some clearing brokers require CIP info for all accounts without regard to the source.

Oft times, the clearing agent cannot tell if the account is ERISA related, just that the transactions are not reportable or that the reporting goes through the broker/dealer.

[Guest terryh123]

To: Demosthenes and Appleby: Thanks for reply. I assumed that was the case and will try to locate specific regulation. I found the ones that covered banks (103.121) and mutual funds (103.131) but had not yet found the reg on brokerage accounts.

[Appleby]

You're welcome.

See § 103.122-Customer identification programs for broker-dealers of the Joint Final Rule: Customer Identification Programs For Broker-Dealers (just click on the URL)

(a) Definitions. For the purposes of this section:

(1)(i) Account means a formal relationship with a broker-dealer established to effect transactions in securities, including, but not limited to, the purchase or sale of securities and securities loaned and borrowed activity, and to hold securities or other assets for safekeeping or as collateral.

(ii) Account does not include:

(A) An account that the broker-dealer acquires through any acquisition, merger, purchase of assets, or assumption of liabilities; or

(B) An account opened for the purpose of participating in an employee benefit plan established under the Employee Retirement Income Security Act of 1974.