FINRA Rule 2090 (Know Your Customer)

September 8, 2011

  • Regulation requires that the Advisor know (and retain) “essential facts” concerning every customer from the initiation of the customer-broker relationship. The essential facts are those required to:
  • Effectively service the customer’s account,
  • Act in accordance with any special handling instructions for the account,
  • Understand the authority of each person acting on behalf of the customer, and
  • Comply with applicable laws, regulations, and rules.
    “The know-your-customer obligation arises at the beginning of the customer-broker relationship and does not depend on whether the Broker has made a recommendation.”
  • Discussion of frequency of updating information on client: 36 month maximum between updates of account information for client.

The information provided above is a summary of FINRA Rule 2090 and FINRA Rule 2011 provided by Insurance Technologies. For full FINRA descriptions of the proposed rule changes, visit www.finra.org.

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