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

Customer Due Diligence (CDD) requires firms to identify and verify customers and assess the risks they present as part of a robust AML program.

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

EDD is required for higher-risk customers such as Politically Exposed Persons (PEPs), customers in high-risk jurisdictions, and those with complex or opaque ownership structures.

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

FinCEN's CDD rule requires identification of beneficial owners who own 25% or more of a legal entity customer, as well as one person who controls the entity.

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

Multiple transactions just below reporting thresholds (structuring) with no apparent business purpose are classic red flags that require a SAR filing.

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

Section 326 of the USA PATRIOT Act requires broker-dealers to implement a CIP that includes verifying the identity of customers opening new accounts.

(CSCP) Certified Securities Compliance Professional Practice Test

(CSCP) Certified Securities Compliance Professional Practice Test

CSCP Anti-Money Laundering & Financial Crimes 2