RBS Banking Regulations and Compliance 2

Question 1

What is 'Enhanced Due Diligence' (EDD) and when is it typically applied?

Accepted Answer

Additional scrutiny applied to higher-risk customers such as Politically Exposed Persons (PEPs)

Answer

Enhanced Due Diligence is a more rigorous level of customer verification applied to higher-risk individuals, such as PEPs or customers from high-risk jurisdictions, to mitigate elevated money laundering risks.

Question 2

Who is classified as a Politically Exposed Person (PEP) in banking compliance?

Accepted Answer

Individuals who hold or have held prominent public functions, such as heads of state or senior government officials

Answer

A PEP is an individual who holds or has held a prominent public position, making them potentially more vulnerable to corruption or bribery, which necessitates enhanced due diligence from banks.

Question 3

What is the main purpose of the UK's Money Laundering Regulations 2017?

Accepted Answer

To implement the EU's Fourth Anti-Money Laundering Directive and set out obligations for firms to prevent financial crime

Answer

The Money Laundering Regulations 2017 implemented the EU's Fourth AML Directive in the UK, setting out specific obligations for firms including customer due diligence, record keeping, and reporting requirements.

Question 4

In banking, what does 'ring-fencing' refer to following the Financial Services (Banking Reform) Act 2013?

Accepted Answer

Separating retail banking services from riskier investment banking activities

Answer

Ring-fencing requires large UK banks to separate their core retail banking services from riskier investment banking activities to protect ordinary customers and taxpayers in the event of a bank failure.

Question 5

What is the role of the Financial Conduct Authority (FCA) in relation to RBS?

Accepted Answer

It regulates RBS's conduct toward customers and markets, ensuring fair treatment and market integrity

Answer

The FCA regulates how firms like RBS conduct their business, focusing on consumer protection, market integrity, and promoting competition to ensure customers are treated fairly.

RBS - Royal Bank of Scotland Practice Test

RBS - Royal Bank of Scotland Practice Test

RBS Banking Regulations and Compliance 2