CSCP Anti-Money Laundering & Financial Crimes 2

Question 1

Which component of an AML program involves verifying the identity of customers and understanding the nature of their business relationships?

Accepted Answer

Customer Due Diligence (CDD)

Answer

Employee training

Answer

Suspicious Activity Reporting

Answer

Recordkeeping

Question 2

Enhanced Due Diligence (EDD) is most commonly required for which category of customers?

Accepted Answer

Politically Exposed Persons (PEPs) and high-risk customers

Answer

Retail investors with small account balances

Answer

Customers who have never filed a SAR

Answer

Employees of FINRA member firms

Question 3

Under FinCEN's 2016 CDD rule, broker-dealers must identify and verify the identity of beneficial owners who own what minimum percentage of a legal entity customer?

Accepted Answer

25%

Answer

10%

Answer

15%

Answer

20%

Question 4

Which of the following transactions would MOST likely trigger a SAR filing at a broker-dealer?

Accepted Answer

Multiple wire transfers just below the $10,000 reporting threshold with no business explanation

Answer

A customer making a large purchase of blue-chip stocks

Answer

A new customer opening a retirement account

Answer

A customer exercising stock options at expiration

Question 5

Under the USA PATRIOT Act, broker-dealers are required to have a Customer Identification Program (CIP). Which of the following is a minimum requirement of a CIP?

Accepted Answer

Verifying the identity of each customer opening an account

Answer

Obtaining a credit score for each new customer

Answer

Conducting annual reviews of all existing customer accounts

Answer

Filing a SAR for all foreign national customers

Question 6

OFAC administers and enforces economic and trade sanctions. What must a firm do when a customer's name matches an OFAC Specially Designated Nationals (SDN) list entry?

Accepted Answer

Block the transaction or account and report to OFAC

Answer

File a SAR and continue normal business operations

Answer

Notify FINRA within 24 hours and close the account

Answer

Escalate to senior management and wait 30 days before acting

Question 7

Which of the following best describes 'layering' in a money laundering scheme?

Accepted Answer

Using complex financial transactions to disguise the origin of illicit funds

Answer

Depositing cash in multiple bank accounts to avoid detection

Answer

Investing criminal proceeds in legitimate businesses

Answer

Creating multiple shell companies to hold assets