Proposed U.S. Know Your Customer Rule Will Formalize Internal Control Procedures

The proposed “Know Your Customer” regulation contained in the Board of Governors of the Federal Reserve System’s memorandum dated September 28, 1998 requires banks to develop for the first time their “Know Your Customer” program, and continues to generate discussion. The proposed rule will also apply eventually to non-bank financial institutions, and will have broad implications for private banking, offshore accounts, and imposition of responsibility on covered persons to design, implement, and regularly update and adjust their “Know Your Customer” internal control systems... [more]