Money Laundering, Terrorism and Financial Institutions - USA Patriot Act Monitor

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4/01/2005 USA PATRIOT Act Monitor News Release: CFTC Issues Customer ID Program Ruling

In CFTC Letter No. 05-05 (available at www.cftc.gov/files/tm/letters/05letters/tm05-05.pdf), the Commodity Futures Trading Commission granted a ruling request, providing that under specified circumstances futures commission merchants (FCMs) and introducing brokers (IBs) may rely on commodity trading advisors to perform customer identification program functions. This ruling parallels a similar ruling made by the SEC in 2004, which permitted brokers and dealers to rely on investment advisers registered with the SEC to perform elements of the BD's CIP (covered in the April 2004 Monitor). Although registered with the CFTC or the SEC (as investment advisers), CTAs are not yet subject to AML program rules, though proposed rules have been issued. This ruling, and the current status of such CIP sharing arrangements, will be addressed in the April issue of the Monitor.

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