The SEC’s Division of Trading and Markets has extended a broker-dealer’s permission to rely on an investment adviser to perform its customer identification responsibilities, assuming the BD satisfies several conditions.  The BD must perform adequate due diligence on the adviser, which must be registered with the SEC.  The agreement between the adviser and the broker-dealer must require the adviser to (i) implement its own AML program, (ii) perform customer identification as required by the PATRIOT Act, (iii) disclose to the BD any suspicious or unusual activity to allow the BD to file SARs, (vi) certify annually, and (v) provide books and records upon request.

OUR TAKE: The staff incrementally raised the bar by requiring more of an investment adviser in the agreement. 

http://www.sec.gov/divisions/marketreg/mr-noaction/2011/sifma011111.pdf