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Question

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

A retail client deposits 8,500inphysicalcurrencyintotheirbrokerageaccountatafirm′sbranchlocationonMondaymorning.Ontheafternoonofthesamebusinessday,theclientdepositsanadditional8,500 in physical currency into their brokerage account at a firm's branch location on Monday morning. On the afternoon of the same business day, the client deposits an additional 3,000 in currency at another branch location of the same broker-dealer. Under Bank Secrecy Act (BSA) rules, which of the following actions is the firm required to take?

  1. File a Currency Transaction Report (CTR) with FinCEN within 15 calendar days of the transactions.Answer
  2. B
    File a Suspicious Activity Report (SAR) within 15 calendar days because single-day currency deposits are capped at $10,000 per customer.
  3. C
    File a Currency Transaction Report (CTR) within 30 calendar days only if a single branch transaction exceeds $10,000.
  4. D
    Notify the customer directly of the mandatory currency filing and submit a Suspicious Activity Report (SAR) within 10 calendar days.

Answer

The firm must file a Currency Transaction Report (CTR) with FinCEN within 15 calendar days of the transactions because the aggregate daily cash deposits exceed $10,000.
Under Bank Secrecy Act (BSA) regulations, member firms must aggregate all physical currency deposits made by a customer across all branch locations during a single business day. Since the customer's total cash deposit equals 11,500(11,500 ( 8,500 + 3,000),itexceedsthe3,000), it exceeds the 10,000 threshold. The firm is obligated to submit a Currency Transaction Report (CTR) to FinCEN within 15 calendar days.

Step-by-Step Solution

1
Calculate total physical currency deposits made by the customer on the same business day across all firm branches.
8,500+8,500 + 3,000 = $11,500 total currency deposited in one business day.
Bank Secrecy Act (BSA) rules require broker-dealers to aggregate all currency deposits made by or on behalf of a single customer during a single business day across all locations.
2
Identify the mandatory regulatory reporting trigger for cash deposits exceeding $10,000.
A Currency Transaction Report (CTR) is required.
Any cash transaction or aggregate daily cash transactions exceeding $10,000 automatically trigger a mandatory CTR filing under FinCEN regulations.
3
Determine the required legal timeframe for submitting the Currency Transaction Report.
The CTR must be filed within 15 calendar days.
FinCEN mandates that CTR filings be completed within 15 calendar days of the reportable cash transaction.

Key Concept

Currency Transaction Report (CTR) Aggregation, Threshold, and Filing Timeline
Estimated Time:1m 0s
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Topics

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