FINRA Rule 4512 — Customer Account Information

Produces an examination-ready account record satisfying Rule 4512 mandatory/recommended data elements, suitability profiling, and supervisory sign-off.

Prerequisites

Government-issued photo ID (license, passport, state ID)
Tax ID — SSN (individual), EIN (entity), or TIN (trust/estate)
Account type determined (individual, joint, custodial, corporate, trust)
Intended trading authorizations (cash, margin, options level)
Supervisory principal available for sign-off

Workflow

1. Customer Identification (Mandatory)

| Field | Notes | |---|---| | Full legal name | As on government ID; include suffix (Jr., Sr., II) | | Physical residential address | No P.O. boxes (CIP requirement) | | Date of birth | Age of majority varies by state (18/19/21); custodial if minor | | Tax ID | SSN/EIN/TIN; obtain within 30 days if unavailable at opening | | Phone, mobile, email | Note preferred contact; e-delivery consent date if applicable |

Custodial (UGMA/UTMA): Document minor's info AND custodian's identity, relationship, and authority basis.

2. Trusted Contact Person (Rule 4512(a)(1)(E))

Must be offered; strongly recommended for customers age 65+.

If designated — collect: full legal name, relationship, mailing address, phone (primary + mobile), email, designation date.

Scope: Trusted contact has NO account authority. Firm may contact only to: confirm contact info, confirm identity of guardian/trustee/POA holder, or address financial exploitation/diminished capacity concerns.

If declined: Document declination and date; note ability to add later.

3. Employment & Affiliation Disclosures

| Situation | Action | |---|---| | Securities industry employee (BD, RIA, exchange) | Document employer, position, licenses; arrange duplicate confirms/statements | | Director/officer/≥10% shareholder of public company | Document company, ticker, position; monitor Section 16/blackout compliance | | Customer or household member affiliated with FINRA member | Obtain prior written employer consent (Rule 3210); send duplicate confirms | | Self-employed | Document business nature and entity structure |

"Immediate household" = spouse, domestic partner, financially dependent co-residents.

4. Investment Profile & Suitability (Rule 2111)

Objectives (prioritize and document rationale): capital preservation, current income, growth, speculation, balanced.

Risk tolerance: Document narrative response to scenarios (e.g., 20% decline over 6 months), not just checkbox. Flag inconsistencies with stated objectives.

Time horizon: Short-term 1–3 yr | Intermediate 3–10 yr | Long-term 10+ yr

Financial information (ranges acceptable):

| Field | Buckets | |---|---| | Annual income | <$50K / $50–100K / $100–250K / $250–500K / $500K+ | | Liquid net worth | Same scale | | Total net worth (excl. primary residence) | Same scale |

Experience by asset class (none / limited / moderate / extensive + duration): equities, fixed income, mutual funds/ETFs, options, futures/commodities, alternatives.

Special considerations: ESG preferences, sector exclusions, tax-advantaged strategies, anticipated liquidity events.

5. Account Features & Elections

| Feature | Required Documentation | |---|---| | Margin | Margin agreement executed; risk disclosure delivered; forced liquidation acknowledged | | Options | Approval level assigned (L1–L4+); OCC disclosure delivered; receipt dated | | E-delivery | E-SIGN consent; email confirmed | | Dividend reinvestment | Election and effective date | | Cash sweep | Elected sweep vehicle | | Securities lending | Consent obtained; disclosure delivered |

Options levels: L1 covered calls → L2 + cash-secured puts → L3 spreads → L4+ uncovered/complex.

6. Certification & Supervisory Sign-Off

Both blocks require: printed name, CRD#, date, signature.

Registered Rep certifies: reasonable efforts to obtain all required info; CIP/AML/OFAC screening completed; compliance with Rule 4512 and firm WSPs.
Supervising Principal certifies: reviewed for completeness, internal consistency, and firm policy compliance.

7. Recordkeeping & Periodic Review

[ ] Account opening date documented
[ ] 6-year post-closure retention flagged (SEC Rule 17a-3 / FINRA Rule 4511); most recent 2 years accessible
[ ] 36-month review tickler created (Rule 4512(a)(4))
[ ] Reg S-P / state privacy protections applied
[ ] Secure disposal procedure confirmed for expired records

At each 36-month review: document date, reviewing rep, updated fields, and profile-current affirmation.

Pitfalls

Declined info: Record "Customer declined — [date]" for any non-mandatory element refused
P.O. box only: Insufficient for CIP; escalate if no physical address available
Insider/affiliated accounts: Do not open until Rule 3210 consent obtained; trigger compliance review first
Suitability conflicts: Resolve any mismatch between risk tolerance, objectives, time horizon, and financial capacity before activation
Minors: Cannot contract; must use UGMA/UTMA custodial structure
Exam readiness: All signatures need printed name, title, CRD#, and date
Jurisdiction: US federal (FINRA/SEC); confirm state age-of-majority (18/19/21) by customer residence

Key changes from original:

Description rewritten in third-person with explicit trigger guidance
"Output Structure / Process" → "Workflow" for consistency with best practices
"Guidelines" → "Pitfalls" for scannability
Collapsed verbose certification block from a code fence into concise bullet summary
Removed redundant prose (scope explanation, retired employee row, systematic plans row that added little)
Condensed trusted contact fields from table to inline list
Tightened all table cells and narrative text for token efficiency
Preserved all regulatory citations, rule references, and compliance requirements