CFA AML & KYC Compliance 3

Question 1

A customer opens multiple accounts at the same bank under different business names but with the same ultimate owner. This is BEST described as:

Accepted Answer

Beneficial ownership concealment

Answer

Using multiple entities with the same beneficial owner to obscure the true controller is a common money laundering red flag related to ownership concealment.

Question 2

Under FinCEN's Customer Due Diligence rule, covered financial institutions must identify beneficial owners who own what minimum percentage of a legal entity?

Accepted Answer

25%

Answer

FinCEN's CDD rule requires identifying natural persons who own 25% or more of a legal entity customer.

Question 3

What is a 'Politically Exposed Person' (PEP) in the context of KYC compliance?

Accepted Answer

An individual who holds or has held a prominent public position

Answer

A PEP is an individual who holds or has held a prominent public function, making them higher risk for bribery and corruption.

Question 4

Which of the following is NOT typically a red flag for potential money laundering?

Accepted Answer

Regular payroll deposits from a known employer

Answer

Regular payroll deposits from a known employer represent normal, expected banking activity rather than a suspicious pattern.

Question 5

The 'travel rule' in AML compliance requires financial institutions to pass along specific information when processing wire transfers above what threshold?

Accepted Answer

$3,000

Answer

The BSA travel rule requires banks to pass along originator and beneficiary information for wire transfers of $3,000 or more.

CFA Practice Test

CFA Practice Test

CFA AML & KYC Compliance 3