Regulatory Compliance & Standards Flashcards
7 cards from real CFP practice questions. Tap to flip, then mark Knew It or Still Learning — missed cards come back until you master them.
Read the first 7 Regulatory Compliance & Standards flashcards as text
A buy now, pay later (BNPL) provider in the US is most likely subject to compliance requirements under which regulation when offering installment credit?
Answer: Regulation Z
Regulation Z (implementing TILA) governs closed-end credit and installment loans, covering most BNPL products that charge interest or fees.
Under the New York Department of Financial Services (NYDFS) Part 500 cybersecurity regulation, covered entities must conduct a penetration test at least:
Answer: Annually
NYDFS Part 500 requires covered entities to conduct annual penetration testing of their information systems.
Which anti-money laundering requirement mandates that financial institutions verify the identity of beneficial owners who own 25% or more of a legal entity customer?
Answer: Customer Due Diligence (CDD) Rule
FinCEN's Customer Due Diligence Rule requires collection of beneficial ownership information for legal entity customers with 25%+ ownership stakes.
When a US fintech firm handles protected health information (PHI) for a healthcare client, which federal law governs its obligations as a business associate?
Answer: HIPAA
HIPAA's Privacy and Security Rules extend to business associates who create, receive, maintain, or transmit PHI on behalf of covered entities.
The Financial Action Task Force (FATF) Recommendation 16 on wire transfers is commonly known as the 'Travel Rule.' What does it require?
Answer: Originator and beneficiary information must travel with wire transfers above threshold amounts
The Travel Rule requires that originator and beneficiary identifying information accompany wire transfers to prevent money laundering.
A fintech company wants to offer cryptocurrency exchange services in the US. Which state-level license is commonly required in New York for this activity?
Answer: BitLicense
New York's BitLicense, issued by the NYDFS, is required for virtual currency business activities conducted within New York.
Under the Gramm-Leach-Bliley Act (GLBA) Safeguards Rule, covered financial institutions must designate a qualified individual to oversee their information security program. This person is commonly referred to as the:
Answer: Qualified Individual
The FTC's updated Safeguards Rule requires covered institutions to designate a 'Qualified Individual' responsible for overseeing the information security program.