WHEN OPENING A NEW ACCOUNT FOR A CUSTOMER, FIRST OBTAIN IMPORTANT INFORMATION ABOUT THAT CUSTOMER

Okay, so you are becoming licensed as a Series 6 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 Series 6 Exam includes customer screening and customer identification program in Section 2.2. Series 6 candidates, therefore, should expect to see questions on these topics on the test.

Bob Eder covers these rules in detail in his Study for the Series 6 Exam. Here is a sample of Bob Eder's treatment:

"Required Customer Information (2.2)"

"Every brokerage firm must assure that its representatives obtain identifying information about a new customer before opening an account for that person, or in situations where the person wishes to exercise trading authority over an account. Lonnie is VP of Ajax Brokerage Co. in charge of supervising customers' accounts. Lonnie requires Ajax's reps to obtain the following items of information about the customer before he will allow any representative to open a new customer account:

1.              name and date of birth;

2.               residence address for a natural person, or principal place of business for a partnership, business, corporation, etc.

3.               for U.S. residents, a taxpayer identification number (TIN), Social Security number, or employer identification number (EID); and

4.              for non-U.S. residents, a U.S. tax number, or a passport showing country of origin, or an identification card for a non-U.S. citizen, or any other government-issued document, evidencing nationality or residence, and bearing a photograph."

Here is the link to FINRA's Content Outline for the Series 6 Exam. See the references to implementing the Customer Identification Program in FINRA's Content Outline, Section 2.2.

Study for the Series 6 Exam is available from Amazon in both paperback and Kindle e-book versions. Here is the link to Bob Eder's Series 6 Exam study manual on Amazon.

See Bob Eder's Author Page on Amazon.com.

For questions about Bob Eder's Study for the Series 6 Exam, or questions in general about the Series 6 exam, such as the Customer Identification Program, feel free to email Bob Eder at bobeder@bobeder.net.

Bob Eder received his Juris Doctor (J.D.) degree from the University of Utah, Quinney College of Law, in 2001.