A client specifies investment type, institution, and amount; know-your-consumer rules apply? Choose the correct statement.

A client specifies investment type, institution, and amount; know-your-consumer rules apply? Choose the correct statement.

• A. Yes, the client must be assessed.
• B. No, the know-your-consumer requirement is not triggered.
• C. Only if the client is not an individual.
• D. Only if the client does not specify.

Answer: (B)

Know-your-consumer rules are tied to establishing or ongoingly maintaining a client relationship and to assessing suitability and risk before providing advice or a tailored service. If a client simply specifies the investment type, the institution, and the amount, this tends to be an execution-only instruction rather than the advisor engaging in a new advisory relationship or conducting a formal suitability assessment. In that context, the consumer-knowledge requirement isn’t triggered. Of course, other AML/KYC steps like verifying identity may still occur as part of regulatory obligations, but the specific Know-Your-Consumer checkpoint isn’t activated by this scenario.

Know-your-consumer rules are tied to establishing or ongoingly maintaining a client relationship and to assessing suitability and risk before providing advice or a tailored service. If a client simply specifies the investment type, the institution, and the amount, this tends to be an execution-only instruction rather than the advisor engaging in a new advisory relationship or conducting a formal suitability assessment. In that context, the consumer-knowledge requirement isn’t triggered. Of course, other AML/KYC steps like verifying identity may still occur as part of regulatory obligations, but the specific Know-Your-Consumer checkpoint isn’t activated by this scenario.