CIP Requirements for Registered Investment Advisers Proposed

The Financial Crimes Enforcement Network (FinCEN), Securities and Exchange Commission (SEC), and Department of Treasury have jointly issued a proposed rule titled Customer Identification Programs for Registered Investment Advisers and Exempt Reporting Advisers. According to a fact sheet, the proposed rule seeks to require Registered Investment Advisers (RIAs) and Exempt Reporting Advisers (ERAs) to, among other things, establish, document, and maintain written customer identification programs, including risk-based procedures for verifying the identify of each customer. RIAs and ERAs would be required to obtain certain identifying information with respect to each customer, such as the customer’s name, date of birth or date of formation, address, and identification number.

The agencies contend that the proposal is generally consistent with the CIP requirements for other financial institutions, such as brokers or dealers and mutual funds, and are designed to align with the CIP requirements across these financial institutions. Written comments on the proposal can be submitted to the agencies within 60 days of publication in the Federal Register.