CFTC permits FCMs and IBs to rely upon certain CTAs to perform elements of their customer identification programs

CFTC permits FCMs and IBs to rely upon certain CTAs to perform elements of their customer identification programs

Wed, 13/04/2005 - 07:13

The CFTC has altered the rules governing customer identification programs run by futures commission merchants (FCMs) and introducing brokers (IBs).


Following the issue of a no-action letter on 14 March by the division of clearing and intermediary oversight, FCMs and IBs can now rely on certain commodity trading advisors (CTAs) to perform elements of their customer identification programs (CIPs).


The relief is available where a CTA is registered with the CFTC or is exempt from registration and is registered with the Securities and Exchange Commission as an investment adviser.


Under the CIP rules, FCMs and IBs are permitted to rely only upon those financial institutions that are subject to final anti-money laundering program (AMLP) rules to conduct elements of their CIPs. CTAs are not subject to AMLP rules.


The no-action relief allows FCMs and IBs to rely upon such CTAs prior to the time the CTAs become subject to final AMLP rules.


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