Regulatory Compliance and Ethics Flashcards
7 cards from real CTP 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 and Ethics flashcards as text
Which regulatory body has primary oversight of swap markets under the Dodd-Frank Wall Street Reform and Consumer Protection Act?
Answer: Commodity Futures Trading Commission (CFTC)
The CFTC has primary authority over swap markets under Dodd-Frank, while the SEC oversees only security-based swaps.
Under Basel III, what is the minimum Common Equity Tier 1 (CET1) capital ratio that banks must maintain as a percentage of risk-weighted assets?
Answer: 4.5%
Basel III requires banks to hold a minimum CET1 ratio of 4.5% of risk-weighted assets to absorb losses before other capital tiers.
What does Sarbanes-Oxley Act Section 404 primarily require of public companies?
Answer: Management assessment and auditor attestation of internal controls over financial reporting
SOX Section 404 mandates that management assess and external auditors attest to the effectiveness of internal controls over financial reporting.
Which U.S. regulation primarily requires financial institutions to implement Anti-Money Laundering (AML) programs and Know Your Customer (KYC) procedures?
Answer: Bank Secrecy Act (BSA)
The Bank Secrecy Act requires financial institutions to establish AML programs including KYC procedures to verify customer identity and detect suspicious activity.
What is the primary purpose of filing a Suspicious Activity Report (SAR) with FinCEN?
Answer: To alert regulators about transactions that may indicate money laundering or financial fraud
SARs are filed to report transactions or patterns of activity that may indicate money laundering, fraud, or other financial crimes to the Financial Crimes Enforcement Network.
Under the Dodd-Frank Act, which statement best describes OTC derivative transaction reporting requirements?
Answer: All OTC derivative transactions must be reported to a swap data repository regardless of size
Under Dodd-Frank, all OTC derivative transactions must be reported to a swap data repository to promote market transparency and systemic risk monitoring.
What is the primary role of the Office of Foreign Assets Control (OFAC) in treasury compliance?
Answer: Enforcing economic and trade sanctions against targeted foreign countries, entities, and individuals
OFAC administers and enforces economic and trade sanctions based on U.S. foreign policy and national security goals, requiring treasury professionals to screen payments against its SDN list.