Interpretive Letter to Angela Coronado, Brecek & Young Advisors, Inc.
November 27, 2000
Ms. Angela Coronado
Transition & Licensing Manager
Brecek & Young Advisors, Inc.
1110 Iron Point Road, Suite #100
Folsom, CA 95630-9998
Dear Ms. Coronado:
This letter is in response to your request of August 22, 2000, for interpretive guidance on NASD Rule 3110(c) ("Rule 3110(c)" or "Rule"), "Customer Account Information," and whether it is necessary for a firm to obtain two separate account application forms from a single client who is opening an individual retail account as well as a retirement account if both accounts will have the same identifying information and investment goals.
Rule 3110(c) requires member firms to maintain customer information on each account that a customer opens. The required information includes the customer's name, address, and whether the customer is of legal age. In addition, the tax identification number or Social Security number of the customer, occupation of the customer, name and address of the customer's employer, and whether the customer is an associated person of another member also must be maintained for certain accounts. If the customer is a corporation, partnership, or other legal entity, then the firm also must collect the names of any persons authorized to transact business on behalf of the entity. Additional information may need to be collected by a firm pursuant to other NASD Rules, such as Rule 2310 for suitability purposes or Rule 3110(c)(3) if the account is a discretionary account.
While Rule 3110(c) requires firms to maintain certain customer information, the Rule does not specify how the information must be collected. However, a firm that collects information regarding more than one account on a single application form must ensure that customers can clearly identify their choices available and responses to be given for each account. Furthermore, as stated in Rule 3110(c), firms are required to maintain separate records for each account of a customer.
Please note that our response is strictly with respect to the collection of customer account information under NASD's Rules and does not address the use of account application forms under various other federal or state laws and regulations.
I hope this letter is responsive to your inquiry. Please note that the opinions expressed in this letter are staff opinions only and have not been reviewed or endorsed by the Board of Directors of NASD Regulation. This letter responds only to the issues you have raised based on the facts as you have described them in your letter, and does not necessarily address any other rule or interpretation of the NASD or all the possible regulatory and legal issues involved.
Please do not hesitate to contact me should you have any further questions about this issue. I can be reached at (202) 728-8159.
Gregory J. Dean
Assistant General Counsel
|cc:||Elisabeth P. Owens, Vice President and Director