FINRA Provides Additional Guidance On AML Obligations

FINRA published guidance concerning the anti-money laundering ("AML") obligations of member firms under FINRA Rule 3310. The guidance provides additional information in light of FinCEN's new rule on customer due diligence (the "CDD Rule"). In the Regulatory Notice, FINRA explained that the CDD Rule requires firms to supplement the "four pillars" of a written AML program (policies and procedures, independent testing, designated responsible individuals, and ongoing training) with a "fifth pillar" focused on CDD.

Specifically, FINRA states that the CDD Rule requires firms to identify and verify the identity of the beneficial owners of all legal entity customers at the time when a new account is opened, subject to certain exclusions and exemptions. The CDD Rule requires firms to obtain this information from the natural person opening an account on behalf of a legal entity customer. To ensure that member firms receive candid information about beneficial owners, the