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SUMMARY OF ROUNDTABLE MEETING:
ADVANCE NOTICE OF PROPOSED RULEMAKING ON CUSTOMER DUE DILIGENCE

ONE LIBERTY PLAZA,
165 BROADWAY
NEW YORK, NY 10006
OCTOBER 5, 2012
9:00AM-4:00PM

The Financial Crimes Enforcement Network (FinCEN) hosted a roundtable meeting to continue gathering information on the Advance Notice of Proposed Rulemaking (ANPRM) on customer due diligence (CDD) requirements for financial institutions. The meeting was held on October 5, 2012, at the Financial Industry Regulatory Authority (FINRA), One Liberty Plaza, 165 Broadway, New York, NY 10006. To maximize private sector participation, the meeting was divided into a morning session from 9:00am to 12:00pm and an afternoon session from 1:00pm to 4:00pm.

On March 5, 2012, FinCEN issued the ANPRM to solicit public comment on the potential development of an explicit CDD obligation for financial institutions, including a requirement to obtain information on the beneficial ownership of customers.1 The comment period closed on June 11, 2012. On July 31, 2012, and September 28, 2012, officials from the U.S. Department of the Treasury (Treasury), including FinCEN, hosted public meetings in Washington, DC and Chicago, IL, respectively, to invite additional comment on specific issues raised during the comment period.2 This roundtable meeting in New York continued Treasury's outreach efforts to engage with representatives from affected financial institutions on these key issues.

This New York meeting was co-chaired by Jamal El-Hindi, Associate Director, Regulatory Policy and Programs Division, FinCEN, and Chip Poncy, Director, Office of Strategic Policy for Terrorist Financing and Financial Crimes, U.S. Department of the Treasury. Representatives from all interested financial institutions were invited to attend and participate. Set forth below is a general summary of the primary issues discussed at the roundtable meeting, as understood by Treasury officials in attendance. It is not intended to be a transcript, and does not purport to include every comment or issue raised during the meeting.

Summary of Roundtable Meeting

Messrs. El-Hindi and Poncy opened the discussion with an overview of Treasury's ongoing outreach process with respect to the ANPRM, and then led an open forum to discuss the following key issues raised during the comment period and at prior public meetings:

Definition of Beneficial Ownership

Obtaining Beneficial Ownership Information - Current Practices

Verification of Beneficial Ownership - Identity and/or Status

Challenges Associated with Certain Products, Services, and Relationships

Other Issues Pertaining to the Advance Notice of Proposed Rulemaking

Conclusion

The co-chairs thanked all participants for attending and described the ongoing outreach process with respect to the ANPRM. In particular, Treasury intends to continue direct engagement with financial institutions, industry associations and other relevant stakeholders through regional and industry-specific outreach events. Treasury officials encouraged participants to continue to send comment letters to FinCEN on any of the issues discussed in the meeting.


1 Financial Crimes Enforcement Network, Customer Due Diligence Requirements for Financial Institutions, 77 FR 13046 (March 5, 2012), available at: http://www.regulations.gov/#!docketDetail;D=FINCEN-2012-0001;dct=FR%252BPR%252BN%252BO%252BSR.
2 Summary of Public Hearing: Advance Notice of Proposed Rulemaking on Customer Due Diligence (July 31, 2012), available at http://www.fincen.gov/whatsnew/html/20120913.html. Public roundtable discussions were also planned for Chicago, New York City, Los Angeles and Miami; summaries of all roundtable discussions will be available on FinCEN's website.
3 See, e.g., FinCEN Guidance, FIN-2007-G001, Application of the Customer Identification Program Rule to Futures Commission Merchants Operating as Executing and Clearing Brokers in Give-Up Arrangements (April 20, 2007), available at http://www.fincen.gov/statutes_regs/guidance/html/cftc_fincen_guidance.html; FinCEN Guidance, FIN-2006-G004, Frequently Asked Question Regarding Customer Identification Programs for Futures Commission Merchants and Introducing Brokers (31 CFR 103.123 (February 14, 2006)), available at http://www.fincen.gov/statutes_regs/guidance/html/futures_omnibus_account_qa_final.html.; Guidance from the Staffs of the Department of the Treasury and the U.S. Securities and Exchange Commission, Question and Answer Regarding the Broker-Dealer Customer Identification Program Rule (31 CFR 103.122) (October 1, 2003), available at http://www.fincen.gov/statutes_regs/guidance/html/20031001.html.
4 See, e.g., 31 CFR 1020.100(c)(2).





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