Customer Identification Program Regulatory Requirements for Mutual Funds
Extension without change of a currently approved collection
No
Regular
08/30/2024
Requested
Previously Approved
36 Months From Approved
09/30/2024
16,152,800
20,000,000
822,900
684,168
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 request applies to CIP requirements for mutual funds.
The estimated total annual burden hours increased from 684,168 hours since the 2020 control number renewal to 822,900 hours in 2024. The burden estimates for maintenance (10 hours) and notification (one hour) of CIP remained the same in the 2020 and 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 mutual funds in the 2020 renewal was 1,591 and the number of mutual funds in 2024 is 1,400. The number of new mutual fund accounts opened annually in 2020 was 20,000,000 and the number of mutual fund accounts opened annually in 2024 is 16,150,000. The primary reason for the increase in burden is the increase in the estimate of CIP implementation of three minutes per account in 2024.
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.
1506-0033 MF CIP Supporting Statement 8_29_2024 Final.docx
Implementation of a Customer Identification Program