5.1.2.1 Know Your Customer Rule
FINRA Rule 2090, the Know Your Customer (KYC) Rule, requires broker-dealers to exercise “reasonable diligence” to collect and maintain essential information on their customers when they open accounts. The rule requires that firms check their customers’ identities, investment histories, investment objectives, and sources of funds. This information provides the broker-dealer with some assurance that its customers are not laundering money and assists the broker-dealer in making suitable recommendations for the customers’ accounts.
If the customer does not provide all the information required on a new account form,
