STEP Regulatory Framework & Compliance 2

Question 1

Under the USA PATRIOT Act, which threshold triggers mandatory Currency Transaction Report (CTR) filing for cash transactions?

Accepted Answer

$10,000

Answer

Financial institutions must file a CTR for cash transactions exceeding $10,000 in a single business day.

Question 2

Which federal agency oversees the enforcement of the Bank Secrecy Act (BSA) for non-bank financial institutions including trust companies?

Accepted Answer

Financial Crimes Enforcement Network (FinCEN)

Answer

FinCEN, a bureau of the U.S. Treasury, administers and enforces BSA compliance for non-bank financial institutions.

Question 3

A fiduciary discovers that a trust beneficiary is subject to OFAC sanctions. What is the MOST appropriate immediate action?

Accepted Answer

Freeze the sanctioned beneficiary's share and file an OFAC report

Answer

OFAC regulations require blocking transactions with sanctioned persons and reporting to OFAC — distributions cannot proceed.

Question 4

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

Accepted Answer

Moving funds through complex transactions to obscure their origin

Answer

Layering is the second stage of money laundering, involving complex transactions designed to distance funds from their criminal origin.

Question 5

Under the Investment Advisers Act of 1940, a trust company managing separately managed accounts for trust clients would most likely need to register with which regulator if AUM exceeds $110 million?

Accepted Answer

Securities and Exchange Commission (SEC)

Answer

Investment advisers with AUM exceeding $110 million generally must register with the SEC under the Investment Advisers Act of 1940.

(STEP) Society of Trust and Estate Practitioners Certification Practice Test

(STEP) Society of Trust and Estate Practitioners Certification Practice Test

STEP Regulatory Framework & Compliance 2