Series 7 Exam Question 266: Answer and Explanation

Question: 266

As part of the USA Patriot Act of 2001, all financial institutions must maintain:

• A. Customer Identification Programs
• B. a fidelity bond
• C. SIPC coverage
• D. All of the above

Correct Answer: A

Explanation:

A. Under the USA Patriot Act, all financial institutions must maintain Customer Identification Programs (CIPs). It is up to the financial institution to verify the identity of any new customers, maintain records of how they verified the identity, and determine whether the new customer appears on any suspected terrorist list or terrorist organization. As part of the identification program, they must obtain the customer's name, date of birth, address (no P.O. boxes), and Social Security number.