FINRA Series 7Opens Accounts and Evaluates Customer ProfileEasy
Under the USA PATRIOT Act's Customer Identification Program (CIP) requirements, a broker-dealer must collect certain minimum data elements before opening an account for a new individual customer. Which of the following is NOT one of the required CIP data elements?
- ALegal name
- BTaxpayer identification number (e.g., Social Security number)
- CDate of birth
- DInvestment objective
Show answer & explanationAnswer & explanation
Correct answer: D. Investment objective
CIP requires firms to collect name, date of birth, address, and identification number (such as SSN or passport number) to verify a customer's identity. Investment objective is part of the suitability/KYC profile, not the CIP identity-verification requirement.
Why the other options are wrong
- A. Legal name is a required CIP element.
- B. A taxpayer ID number is a required CIP element.
- C. Date of birth is a required CIP element.
Customer Identification Program (CIP)
A PATRIOT Act requirement that broker-dealers verify the identity of every new customer using specific identifying information.
- Required elements: name, date of birth, address, and ID number
- Applies to every new account, individual or entity
- Separate from suitability/KYC information like investment objectives
Memory trick: CIP = 'Name, Birth, Address, Number' — NOT goals or risk tolerance.