CTP Regulatory Compliance and Ethics

Question 1

Which regulatory body has primary oversight of swap markets under the Dodd-Frank Wall Street Reform and Consumer Protection Act?

Accepted Answer

Commodity Futures Trading Commission (CFTC)

Answer

The CFTC has primary authority over swap markets under Dodd-Frank, while the SEC oversees only security-based swaps.

Question 2

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?

Accepted Answer

4.5%

Answer

Basel III requires banks to hold a minimum CET1 ratio of 4.5% of risk-weighted assets to absorb losses before other capital tiers.

Question 3

What does Sarbanes-Oxley Act Section 404 primarily require of public companies?

Accepted Answer

Management assessment and auditor attestation of internal controls over financial reporting

Answer

SOX Section 404 mandates that management assess and external auditors attest to the effectiveness of internal controls over financial reporting.

Question 4

Which U.S. regulation primarily requires financial institutions to implement Anti-Money Laundering (AML) programs and Know Your Customer (KYC) procedures?

Accepted Answer

Bank Secrecy Act (BSA)

Answer

The Bank Secrecy Act requires financial institutions to establish AML programs including KYC procedures to verify customer identity and detect suspicious activity.

Question 5

What is the primary purpose of filing a Suspicious Activity Report (SAR) with FinCEN?

Accepted Answer

To alert regulators about transactions that may indicate money laundering or financial fraud

Answer

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.

Certified Treasury Professional Exam Practice Test

Certified Treasury Professional Exam Practice Test

CTP Regulatory Compliance and Ethics