FINRA Rule 4512 — Customer Account Information

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)

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

"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):

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

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

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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