We have a Non-Deposit Investment Product subsidiary. Our bank's BSA program addresses activity at the NDIP. While reading the CIP proposal, I noticed that the CIP must be approved by the Board of Directors like the BSA program. This made me wonder: Does anyone know if NDIPs must have their own BSA program? Can we put the NDIP CIP procedures in with the bank's CIP procedures? Is the NDIP Board required to approve the program even though the bank's Board approved it?

I can see no one wants to attach this one, so let me try. First I need to know some things. Is your NDIP under bank direction, holding company direction or third party agreement?

It is under Bank direction. I think the NDIP is required under the USA PATRIOT Act to have its own anti-money laundering program (which includes the CIP), and its Board will have to approve it. Do they have to have their own BSA Officer too? Is everybody else aware that the NDIP has to complete CTRs and SARs? I'm surprised nobody has addressed this stuff. Believe me I searched the threads and this web site. Maybe I'm an idiot and I've just overlooked what everyone else considers obvious, but I can't believe every other bank has already created a separate BSA program for their NDIP, had the NDIP Board approve it, and appointed an NDIP officer as BSA Officer for the NDIP. I've also never heard anyone discuss this at any seminars, and I've attended quite a few.

Max,

If your NDIP sub is a member of the NASD or is SEC registered, then there are requirements for USA Patriot Act Compliance. I'm not involved in a daily basis with our brokerage sub, but I do know that the NASD has issued a number of different pieces. As I recall the brokerage industry will be required to start filing SARs under BSA (Don't ya just love acromyns)is later this year.

If your sub is NASD regulated, I suggest you review the Conduct Rules at www.nasdr.com. If that doesn't help then please provide more info in a subsequent post.