A client, a U.S. citizen residing abroad, wishes to open a new brokerage account with a U.S. broker-dealer. Which of the following is true regarding the Customer Identification Program (CIP) requirements for this client?
- AThe broker-dealer must obtain a U.S. taxpayer identification number (TIN) and verify their identity using acceptable U.S. government-issued identification.
- BA foreign passport is sufficient for identity verification without a U.S. TIN.
- CThe broker-dealer must verify the client's identity using documents from their country of residence.
- DCIP requirements do not apply to U.S. citizens residing abroad.
Show answer & explanationAnswer & explanation
Correct answer: A. The broker-dealer must obtain a U.S. taxpayer identification number (TIN) and verify their identity using acceptable U.S. government-issued identification.
For U.S. citizens, regardless of residence, the CIP requires a U.S. taxpayer identification number (TIN) and verification of identity using acceptable U.S. government-issued identification (e.g., U.S. passport, driver's license). Foreign documents or a foreign passport alone are generally not sufficient for U.S. citizens for CIP purposes, even if they reside abroad.
Why the other options are wrong
- B. A foreign passport is generally not sufficient for a U.S. citizen; a U.S. TIN and U.S. government-issued ID are required.
- C. While supplemental foreign documents might be collected, primary verification for a U.S. citizen typically requires U.S. documentation and a U.S. TIN.
- D. CIP requirements apply to all new accounts, including those for U.S. citizens residing abroad.
CIP for U.S. Citizens Abroad
U.S. citizens, even when residing abroad, must comply with U.S. Customer Identification Program (CIP) requirements, including providing a U.S. Taxpayer Identification Number (TIN) and U.S. government-issued identification for verification.
- CIP applies to all new accounts.
- U.S. citizens require a U.S. TIN.
- Identity verified with U.S. government-issued ID.
- Residency abroad does not exempt U.S. citizens from these specific U.S. requirements.
Memory trick: US citizens abroad still need US TIN and US ID for CIP, no foreign shortcuts.