BMO Compliance & Ethical Standards 3

Question 1

An employee learns through their work role that a public company is about to announce a major acquisition. Trading on this information before the announcement is known as:

Accepted Answer

Insider trading

Answer

Insider trading involves buying or selling securities based on material non-public information, which is illegal and a serious ethical violation.

Question 2

Under OSFI guidelines, BMO must maintain a compliance function that is:

Accepted Answer

Independent from the business lines it oversees to avoid conflicts of interest

Answer

OSFI requires that the compliance function maintain independence from the business lines it monitors to ensure objective oversight.

Question 3

A client requests that BMO structure multiple cash deposits just below the $10,000 reporting threshold to avoid regulatory reporting. This practice is called:

Accepted Answer

Structuring or smurfing

Answer

Structuring (or smurfing) is the illegal practice of breaking up transactions to avoid currency transaction reporting thresholds.

Question 4

Which BMO principle requires employees to treat customer information with strict confidentiality, sharing it only on a need-to-know basis?

Accepted Answer

Privacy and data protection obligations

Answer

Privacy obligations under PIPEDA and BMO's internal policies require that client information be accessed only by those with a legitimate business need.

Question 5

When must BMO report a large cash transaction (LCT) to FINTRAC?

Accepted Answer

When a single cash transaction is $10,000 CAD or more within a 24-hour period

Answer

FINTRAC requires financial institutions to report all cash transactions of $10,000 CAD or more received within a 24-hour period.

(BMO) Bank of Montreal Assessment Practice Test

(BMO) Bank of Montreal Assessment Practice Test

BMO Compliance & Ethical Standards 3