Apply customer identification, know-your-customer, and account-documentation requirements, including discretionary authorization and the obligation to identify and escalate suspicious activity.

How does FINRA Rule 2090, the know-your-customer rule, define the core obligation a firm owes when opening and maintaining an account?

• AIt requires the firm to ensure that every recommendation made is suitable in light of the customer's financial situation and needs.
• BIt requires the firm to verify the customer's identity against a government-issued photograph before the first trade is entered.
• CIt requires the firm to use reasonable diligence to know the essential facts about every customer needed to effectively service the account.check_circle Correct
• DIt requires the firm to update the customer's financial profile in writing at least once every 36 months.

Why A is wrong: Ensuring recommendations are suitable is the province of the suitability rule, Rule 2111; Rule 2090 governs knowing the customer, not judging individual recommendations.

Why B is wrong: Photographic identity verification belongs to the Customer Identification Program, not to Rule 2090, which concerns the essential facts needed to service the relationship.

Why C is correct: Rule 2090 obliges a firm to use reasonable diligence, in opening and maintaining each account, to know the essential facts about the customer that let it service the account and follow instructions.

Why D is wrong: A 36-month refresh cycle applies to certain discretionary and institutional account records, not to the general standard Rule 2090 sets for knowing the customer.