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Question

Difficulty: EasyAnti-Money Laundering (AML), KYC, and Sanctions Compliance

Under U.S. Anti-Money Laundering (AML) regulations and Bank Secrecy Act (BSA) rules, broker-dealers must adhere to specific reporting requirements for currency and suspicious activities. Which of the following statements regarding AML filing obligations are correct?

  1. A Currency Transaction Report (CTR) must be filed for physical currency transactions exceeding $10,000 in a single business day within 15 calendar days.Answer
  2. A Suspicious Activity Report (SAR) must be filed for transactions involving at least $5,000 where money laundering or structuring is suspected within 30 calendar days.Answer
  3. C
    A Currency Transaction Report (CTR) must be filed for any outbound wire transfer exceeding $5,000, regardless of whether physical currency is used.
  4. D
    A broker-dealer must notify the account owner in writing within 10 business days after a Suspicious Activity Report (SAR) is submitted regarding their account.

Answer

The correct statements are that a Currency Transaction Report (CTR) must be filed within 15 calendar days for physical cash transactions exceeding 10,000,andaSuspiciousActivityReport(SAR)mustbefiledwithin30calendardaysforsuspicioustransactionsinvolvingatleast10,000, and a Suspicious Activity Report (SAR) must be filed within 30 calendar days for suspicious transactions involving at least 5,000.
The statement regarding CTRs correctly accurately states the 10,000physicalcashthresholdandthe15−dayfilingperiod.ThestatementregardingSARscorrectlystatesthe10,000 physical cash threshold and the 15-day filing period. The statement regarding SARs correctly states the 5,000 threshold for suspicious transactions and the 30-day filing timeline.

Step-by-Step Solution

1
Identify Currency Transaction Report (CTR) rules and thresholds.
CTRs cover physical cash transactions over $10,000 conducted in a single business day and have a 15 calendar day filing deadline with FinCEN.
The Bank Secrecy Act requires tracking of large physical currency movements to prevent money laundering.
2
Identify Suspicious Activity Report (SAR) rules and thresholds.
SARs cover suspected illegal activity, structuring, or lack of legitimate business purpose involving at least $5,000 and must be filed within 30 calendar days.
FinCEN requires reporting of suspicious behaviors to combat illicit financial flows.
3
Evaluate restrictions on SAR disclosures.
Notifying a customer that a SAR has been filed is strictly illegal.
Confidentiality protects ongoing law enforcement investigations and prevents tipping off suspects.

Key Concept

AML Reporting Thresholds and Timelines (CTR vs. SAR)
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Topics

Anti-Money Laundering (AML), KYC, and Sanctions Compliance