Know Your Customer

Regulatory status current as of June 2026 — verify effective dates, dollar thresholds, and pending rulemakings against current SEC/FINRA/FinCEN sources before advising.

Core Concepts

FINRA Rule 2090 — Know Your Customer

Every FINRA member must use reasonable diligence, with regard to the opening and maintenance of every account, to know and retain the essential facts concerning every customer and concerning the authority of each person acting on behalf of the customer. "Essential facts" are those required to: (a) effectively service the account, (b) act in accordance with any special handling instructions, (c) understand the authority of each person acting on behalf of the customer, and (d) comply with applicable laws, regulations, and rules.

Customer Identification Program (CIP)

Required under USA PATRIOT Act Section 326 and implementing regulations. The broker-dealer CIP rule is 31 CFR 1023.220; the bank CIP rule is 31 CFR 1020.220. (SEC Rule 17a-8 separately requires broker-dealers to comply with BSA recordkeeping and reporting.) The CIP must include:

• Identity verification for each customer opening an account: name, date of birth (for individuals), address, and identification number (SSN for US persons; passport number/country or other government ID for non-US persons)
• Verification procedures using documentary methods (government-issued ID), non-documentary methods (credit bureau checks, public database searches, financial statement review), or a combination
• Recordkeeping — retain identifying information and verification methods for 5 years after account closure
• Comparison with government lists — check customer names against OFAC and other government terrorist/sanctions lists
• Customer notice — inform customers that information is being collected to verify identity