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Question

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

A retail customer visits a broker-dealer branch office and deposits $11,500 in physical currency into their brokerage account. Under the Bank Secrecy Act and Anti-Money Laundering (AML) regulations, which mandatory reporting requirement must the member firm fulfill regarding this transaction?

  1. File a Currency Transaction Report (CTR) with FinCEN within 15 calendar days of the transaction.Answer
  2. B
    File a Suspicious Activity Report (SAR) with FinCEN within 30 calendar days of the transaction.
  3. C
    File a Currency Transaction Report (CTR) with FINRA within 30 calendar days of the transaction.
  4. D
    File a Suspicious Activity Report (SAR) with the SEC within 15 calendar days of the transaction.

Answer

The member firm must file a Currency Transaction Report (CTR) with FinCEN within 15 calendar days of the transaction.
Under the Bank Secrecy Act (BSA), financial institutions including broker-dealers must file a Currency Transaction Report (CTR) with the Financial Crimes Enforcement Network (FinCEN) whenever a customer deposits, withdraws, or transfers more than $10,000 in cash or currency in a single business day. The CTR must be filed within 15 calendar days of the transaction date.

Step-by-Step Solution

1
Identify the nature and monetary amount of the customer transaction.
The transaction consists of a physical currency deposit of $11,500.
Under federal AML rules, cash transactions exceeding $10,000 in a single business day trigger statutory reporting obligations.
2
Determine the required regulatory form under Bank Secrecy Act rules.
A Currency Transaction Report (CTR) is required because physical cash exceeds the $10,000 threshold.
Cash receipts over $10,000 mandate CTR reporting regardless of whether suspicious activity is suspected.
3
Identify the proper regulatory agency and mandatory filing timeframe.
The CTR must be submitted electronically to FinCEN within 15 calendar days.
FinCEN receives BSA currency reports, and the mandatory filing deadline for a CTR is 15 calendar days.

Key Concept

Currency Transaction Report (CTR) Thresholds and Filing Timelines
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Topics

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