An investor submits all necessary documentation to open a new brokerage account with a broker-dealer. The firm's internal compliance policy strictly prohibits disclosing nonpublic personal information to nonaffiliated third parties, outside of standard legal exceptions. What is the firm's obligation regarding the delivery of an initial privacy disclosure under Regulation S-P?
- Provide the initial privacy notice at or before establishing the customer relationship, regardless of whether nonpublic personal information will be disclosed to nonaffiliated third parties.Cevap
- BWithhold the initial privacy notice until nonpublic personal information is actively shared with a nonaffiliated third party.
- CDeliver the initial privacy notice within 60 calendar days following the completion of the first trade execution in the account.
- DProvide the privacy disclosure only upon receiving an explicit written request from the newly registered account owner.
Cevap
The firm must provide the initial privacy notice at or before establishing the customer relationship, regardless of whether nonpublic personal information will be disclosed to nonaffiliated third parties.
Under SEC Regulation S-P, a broker-dealer must provide a clear and conspicuous initial privacy notice to any individual who becomes a customer no later than when the firm establishes the customer relationship. This requirement applies whenever an account is opened, regardless of whether the firm plans to share nonpublic personal information with nonaffiliated third parties.
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Regulation S-P Initial Privacy Notice Delivery Requirements