AFP AFP Financial Regulations and Compliance 1

Question 1

Which U.S. regulation requires financial institutions to implement Customer Identification Programs (CIP) as part of anti-money laundering efforts?

Accepted Answer

Bank Secrecy Act / USA PATRIOT Act

Answer

The Bank Secrecy Act, enhanced by the USA PATRIOT Act, mandates CIP requirements to verify the identity of customers and prevent money laundering.

Question 2

Under Dodd-Frank, which types of OTC derivatives are now required to be centrally cleared?

Accepted Answer

Standardized interest rate and credit default swaps

Answer

Dodd-Frank mandates central clearing for standardized OTC interest rate swaps and credit default swaps to reduce systemic risk.

Question 3

What is the primary purpose of Sarbanes-Oxley Section 302 for corporate treasury?

Accepted Answer

Requires CEO/CFO to certify the accuracy of financial reports

Answer

SOX Section 302 requires the CEO and CFO to personally certify that financial statements are accurate and fairly presented.

Question 4

Which regulation governs the reporting of foreign bank accounts held by U.S. persons, relevant to corporate treasury?

Accepted Answer

FBAR (FinCEN Form 114)

Answer

FBAR requires U.S. persons and entities with foreign financial accounts exceeding $10,000 to report those accounts annually to FinCEN.

Question 5

What does FATCA require of foreign financial institutions with respect to U.S. account holders?

Accepted Answer

Report information about U.S. account holders to the IRS

Answer

FATCA requires foreign financial institutions to identify and report accounts held by U.S. taxpayers to the IRS or face withholding penalties.

AFP - Association for Financial Professionals Practice Test