Internal Control Questionnaires and Verification Procedures

Customer and Dealer Accounts

1. Do account bookkeepers periodically transfer to different account sections or otherwise rotate posting assignments?

2. Are letters mailed to customers requesting confirmation of changes of address?

   1. Are confirmation requests mailed to both the customer’s old and new address?

3. Are separate customer account ledgers maintained for:

   1. Employees?

   2. Affiliates?

   3. Own bank’s trust accounts?

4. Do exclusively designated individuals who have no incompatible duties handle customer inquiries and complaints?

5. Are written municipal securities customer account broker- to-broker transfers coordinated so that (MSRB rule G-26):

   1. Upon receipt of a customer transfer instruction, the receiving party immediately submits the instruction to the carrying party?

   2. The customer account carrying party within five business days validates and returns the instruction or takes exception to and advises the receiving party?

   3. The customer account carrying party, within five business days of the validation, completes the transfer of the customer account?

   4. The customer account receiving and carrying parties establish fail-to-receive and fail-to-deliver contracts on their books and institute the closeout procedures of rule G- 12?

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