Anti-Money Laundering and Regulation SP

Question 1

What would require a customer to receive a higher level of scrutiny under the PATRIOT act?

Answer 1

• from a county not member of FATF
• reside in country w/ bank secrecy laws
• operates a cash-intensive business

Question 2

What is the OFAC list of SDNs?

Answer 2

List of specifically designated nationals (SDN) list of named counties, organizations, and persons with whom anyone in the US is prohibited from doing business

Question 3

Where are SARS reported to, and how long does the broker dealer have to report it?

Answer 3

Report to FinCEN within 30 days of discovering suspicious activity

Question 4

What is layering?

Answer 4

Attempts to make frequent or large deposits of currency or cash

Question 5

What is structuring?

Answer 5

Case transactions consistently depositing funds just under the $10,000 max limit set by the IRS

Question 6

What are the 3 suspicious activities for monitoring?

Answer 6

1. Wire transfers
2. Deposits
3. Monetary instruments

Question 7

What is Regulation SP?

Answer 7

Broker dealers have to provide RETAIL customers with a notice of the firm’s privacy policies and practices

Question 8

When must privacy notices be sent?

Answer 8

When the account is opened for new customers and annually to all customers

Question 9

What is an opt-out notice?

Answer 9

Allows customers to opt out of the firm divulging non-public information to 3rd parties (note that the firm must give notice to their customers of this intent.) The customer is then given thirty (30) days to opt out

Question 10

What are acceptable opt out notices?

Answer 10

• Including a reply form for opt out notice
• Providing electronic means to opt out
• Providing a toll-free phone number
• Including designated check boxes on relevant forms