Chapter 3 - AML Regulation (FINRA RULE 3310)

Question 1

Firms are required to designate and identify to FINRA, through the FINRA Contact System (FCS), the compliance officer charged with oversight of the firm’s anti-money laundering program. The firm must provide name, title, mailing address, email address, telephone number, and facsimile number of this contact. If there is a change in the designation,

Answer 1

If there is a change in the designation, the firm must provide notification to FINRA within 30 days and then verify the name(s) within 17 business days after the end of each calendar year.

Question 2

SAR must be filed within ?

Answer 2

Reports of suspicious financial activities must be filed within 30 days. Reference: 3.2.2 in the License Exam Manual

Question 3

Form 112 (CTR)

Answer 3

A currency transaction report for those transactions in currency of more than $10,000.

Question 4

T/F - The firm’s AML program must be approved in writing by a member of senior management as well as any subsequent change to the program.

Answer 4

TRUE

Question 5

Who and when must approve a member’s AML program ?

Answer 5

FINRA Rule 3310 requires that a member of the firm’s senior management approve the firm’s anti-money laundering program and that the program be reviewed atleast annually by an independent examiner who is knowledgeable in the Bank Secrecy Act and its associated regulations.

Question 6

Exception to AML are the following and when must they test ?

Answer 6

The exception applies to firms that do not execute transactions for customers or otherwise carry customer accounts and do not act as an introducing broker. These firms may test once every two years. Examples of firms that may test every two years are firms engaged solely in merger and acquisition work, firms engaged solely in selling DPPs, and firms engaged solely in private placements.

Question 7

Penalty for failure to submit Form 112

Answer 7

Failure to report can result in fines of up to $500,000, 10 years in prison, or both.

Question 8

Form 112 must be filed within how man days of receipt of the currency.

Answer 8

15

Question 9

Firms must file a SAR within how many days ?

Answer 9

Firms must file a SAR within 30 days

Question 10

SARs are required to report to which division ?

Answer 10

are required to report to Financial Crimes Enforcement Network (FinCEN)

Question 11

Min dollar value to submit an SAR ?

Answer 11

$5000

Question 12

The USA PATRIOT Act requires firms to make and retain records relating to wire transfers of x$ or more.

Answer 12

The USA PATRIOT Act requires firms to make and retain records relating to wire transfers of $3,000 or more.

Question 13

Structuring

Answer 13

Structuring refers to handling currency transactions in a way designed to avoid reporting requirements

Question 14

If there is a match to a named subject, you must respond to the 314(a) request within how many calendar days.

Answer 14

If there is a match to a named subject, you must respond to the 314(a) request within 14 calendar days.

Question 15

How often must member firms require AML testing ?

Answer 15

annually