UNIT 03.03-002 Flashcards
Under Regulation S-P, nonpublic personal information would not include a customer’s
home address.
The Securities and Exchange Commission (SEC) in Regulation S-P notes examples of nonpublic personal information to include a customer’s Social Security number, account balances, transaction history, and any information collected through an internet cookie. A home address would not be considered nonpublic personal information.
Obtaining all of the following complies with the regulations regarding customer identification programs except
A) taxpayer identification number.
B) date of birth.
C) post office box, instead of a physical address, if it is the primary mailing address.
D) name.
post office box, instead of a physical address, if it is the primary mailing address.
A post office box is never acceptable without a physical address.
TRUE
A) taxpayer identification number.
B) date of birth.
D) name.
For a non-U.S. person, which of the following is not an acceptable document for a customer identification program?
A) Foreign passport
B) Eurail pass
C) Other current, government-issued photo ID
D) Alien ID
A Eurail pass does not meet the standards set under the USA PATRIOT Act. The others listed here generally do, dependent on the issuing nation.
TRUE
A) Foreign passport
C) Other current, government-issued photo ID
D) Alien ID
When and how often is your firm required to provide a privacy notice describing its privacy policies to customers?
When a new account is opened and annually thereafter
Privacy notifications under Regulation S-P must be provided to customers whenever a new account is opened and annually thereafter.
When opening a new account for an individual investor, FINRA asks its member to make a reasonable effort to obtain certain information about the account. Included information would be all of the following except
A) the name(s) of the customer’s dependents.
B) the customer’s tax identification or Social Security number.
C) whether the customer is an associated person of another member.
D) the occupation of the customer and name and address of the employer.
the name(s) of the customer’s dependents.
Nowhere in the FINRA rules on account opening does it require or suggest obtaining personal information about family members. That information becomes important when we look at the suitability rules. Please note that the tax ID or Social Security number is required under the customer identification program (CIP), but not FINRA rules.
TRUE
B) the customer’s tax identification or Social Security number.
C) whether the customer is an associated person of another member.
D) the occupation of the customer and name and address of the employer.
Knowing a customer means gaining an understanding of which of the following?
A) Nonfinancial circumstances
B) All of these
C) Financial needs
D) Financial circumstances
B) All of these
Knowing your customers means more than just knowing their financial information. It includes an understanding of their circumstances and needs, both financial and nonfinancial.
All of the following addresses are acceptable to open an account for a partnership except
A) a principal place of business.
B) a Post Office Box.
C) a local office.
D) any physical location.
B) a Post Office Box.
PO Boxes are never acceptable addresses. An actual, physical, location is required.
TRUE
A) a principal place of business.
C) a local office.
D) any physical location.
In an effort to safeguard customer information, which regulation specifies securing computers, placing customer information in locked files, and encrypting email?
Regulation S-P
Safeguard requirements such as securing desktop and laptop computers and encrypting email to protect customer information is an obligation of financial institutions under Regulation S-P. Paperwork that contains customer’s NPI must be kept secured.
Which of the following is NOT a provision of Regulation S-P?
A) The firm must give the customer reasons to not opt out.
B) The firm must initially, when opening the account and annually thereafter, provide the customer with a privacy notice.
C) The firm must give the customer the opportunity to opt out at the opening of the account.
D) The firm has an obligation to protect the privacy of customer information.
A) The firm must give the customer reasons to not opt out.
The firm is required to give the opportunity to opt out. The firm is not required to try to convince them not to opt out.
TRUE
B) The firm must initially, when opening the account and annually thereafter, provide the customer with a privacy notice.
C) The firm must give the customer the opportunity to opt out at the opening of the account.
D) The firm has an obligation to protect the privacy of customer information.
In order to open an account a broker-dealer must collect all of the following information except
A) customer’s name.
B) customer’s address.
C) customer’s job history.
D) customer’s tax ID number.
C) customer’s job history.
A customer’s job history is not required information when opening an account; a name, address, and tax ID number (or the fact it has been applied for) are required.
TRUE
A) customer’s name.
B) customer’s address.
D) customer’s tax ID number.
