Welcome to Customer Privacy: the controls that keep customer information confidential, set the limits on sharing it, honor beneficial owners' privacy choices, and help firms recognize possible identity theft.
Exam Weight: 4 of 15 in Function 2 (8% of exam)
What You'll Learn
In this unit, you'll cover:
- Confidentiality controls: Protecting customer information and controlling its movement between departments and outside parties
- Fiduciary information: Limits on using securities-ownership information obtained while acting as a fiduciary
- Regulation S-P: Nonpublic personal information, privacy notices, information-sharing limits, opt-out rights, and safeguards
- Beneficial-owner elections: The difference between an objecting beneficial owner and a non-objecting beneficial owner
- Regulation S-ID: The written identity-theft prevention program for covered accounts
Why This Matters
Privacy is an operational control, not merely a promise in an account-opening packet. A firm must decide who can access information, why that access is needed, and whether disclosure is permitted before information travels inside or outside the firm.
The exam often separates closely related ideas:
- Regulation S-P governs privacy, sharing, and safeguards for customer information.
- Regulation S-ID addresses red flags that may signal identity theft in covered accounts.
- An objecting beneficial owner (OBO) election concerns disclosure of identity to an issuer, not the owner's status as a beneficial owner.
The sections that follow move from confidentiality controls to customer disclosures, then beneficial-owner choices and identity-theft response.