Customer Identification Program Regulatory Requirements for Futures Commission Merchants and Introducing Brokers in Commodities
Extension without change of a currently approved collection
No
Regular
08/30/2024
Requested
Previously Approved
36 Months From Approved
09/30/2024
558,908
1,165
38,344
12,815
0
0
31 U.S.C. 5318(l) requires the Secretary to issue regulations prescribing minimum standards for customer identification programs (CIPs) for financial institutions. Regulations implementing section 5318(l) are as follows: (i) banks (31 CFR 1020.220); (ii) brokers-dealers (31 CFR 1023.220); (iii) mutual funds (31 CFR 1024.220); and (iv) futures commission merchants and introducing brokers in commodities (31 CFR 1026.220). Under the CIP regulations, the minimum requirements include: 1) implementation of a written customer identification program appropriate for the financial institutionâs size and type of business; 2) identity verification procedures; 3) recordkeeping; 4) comparison with government lists; and 5) customer notice. This information collection applies to CIP requirements for futures commission merchants and introducing brokers in commodities.
The estimated total annual burden hours increased from 12,815 hours since the last control number renewal in 2020 to 38,344 hours in 2024. The burden estimates for maintenance (10 hours) and notification (one hour) of CIP remained the same in the 2020 and the 2024 renewals. However, the implementation of CIP increased from two minutes per account in 2020 to three minutes per account in 2024. The number of futures commission merchants and introducing brokers in commodities in the 2020 renewal was 1,165 and the number of futures commission merchants and introducing brokers in commodities in 2024 is 954. The primary reason for the increase in burden is because FinCEN was able to obtain an estimate of the number of new accounts opened per year by futures commission merchants and introducing brokers in commodities (557,000 accounts) for the 2024 renewal. FinCEN did not have this estimate for futures commission merchants and introducing brokers in commodities in the 2020 renewal, so in 2024 there is an increase in burden hours for futures commission merchants and introducing brokers in commodities applicable to CIP implementation of 27,850 hours.
On behalf of this Federal agency, I certify that the collection of information encompassed by this request complies with 5 CFR 1320.9 and the related provisions of 5 CFR 1320.8(b)(3).
The following is a summary of the topics, regarding the proposed collection of information, that the certification covers:
(i) Why the information is being collected;
(ii) Use of information;
(iii) Burden estimate;
(iv) Nature of response (voluntary, required for a benefit, or mandatory);
(v) Nature and extent of confidentiality; and
(vi) Need to display currently valid OMB control number;
If you are unable to certify compliance with any of these provisions, identify the item by leaving the box unchecked and explain the reason in the Supporting Statement.
1506-0022 FCM IB CIP Supporting Statement 8_29_2024.docx
Implementation of a Customer Identification Program