We are needing to add to our CIP procedures how we will go about verifying Brokers with regard to brokered CD's. I'm wondering what other banks are doing to verify the brokers. What kind of documentation are you getting?

Cathy P,

We are not really a player in this market, but we broker CD's through a major FI, and there is a clause in the agreement that states that the FI will comply w/ federal AML rules and regs.

We perform general due diligence review (financials, principals), look to see if there are any regulatory enforcement actions if they are regulated and execute contract with agreement that they will perform due diligence and comply with CIP requirements to insure they know true identity of each customer in the brokered pool. Senior management approval is required to establish a broker relationship.

We require CIP on the broker if it is not 1) a financial institution regulated by a Federal functional regulator or bank regulated by a state bank 2) A department or agency of the United States, of any State, or of any political subdivision 3) Any Entity established under the laws of the US of any State, or of any political subdivision of any
State, or under an interstate compact between two or more States, that exercises governmental
authority on behalf of the US or any such State or political subdivision.
4) Any Entity, other than a bank, whose common stock or analogous equity interests are listed on the
New York Stock Exchange or the American Stock Exchange or whose common stock or analogous
equity interest have been designed as a Nasdaq National Market Security listed on the Nasdaq Stock
Market (except stock or interests listed under the separate “Nasdaq” Small-Cap Issues” heading).

Ever broker I've seen fits in these exceptions but if not we would ID them with name address DOB SS# primary and secondary ID etc.

Thank you all for your responses. The reason I'm doing this is that our examiners stated we need to add due diligence procedures to our CIP policy/procedures and I wasn't sure how we were going to go about collecting documentation to verify them. Thank you Katie B. for also reminding me of the exempt brokers.