FINRA Series 7Opens Accounts and Evaluates Customer ProfileMedium
A high-net-worth customer requests that her account be opened as a 'numbered account' rather than in her own name, primarily for privacy purposes. What must the broker-dealer obtain before opening this account?
- AA notarized copy of her passport only, with no other identifying documents
- BA written statement, signed by the customer, attesting to her ownership of the account
- CApproval from FINRA's Department of Enforcement
- DNothing additional; numbered accounts require no special documentation
Show answer & explanationAnswer & explanation
Correct answer: B. A written statement, signed by the customer, attesting to her ownership of the account
Numbered or symbol accounts are permitted for privacy, but the firm must have on file a written statement signed by the customer attesting to ownership of the account. The account still must comply fully with CIP requirements even though the name isn't used on statements or records.
Why the other options are wrong
- A. A passport alone doesn't replace the required signed ownership attestation.
- C. FINRA does not pre-approve individual numbered accounts.
- D. Documentation is required; the account name is masked, but ownership records must exist.
Numbered (Symbol) Account
An account identified by a number or symbol instead of the customer's name for privacy, but requiring a signed written statement of ownership on file.
- Still subject to full CIP/KYC verification
- Requires signed ownership attestation
- Used for privacy, not to hide beneficial ownership from the firm
Memory trick: Hidden name, but ownership must still be signed and named internally.