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Question

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

Match each Anti-Money Laundering (AML) or Customer Identification Program (CIP) compliance term with its correct regulatory requirement or definition.

  • Currency Transaction Report (CTR)Must be filed for physical cash transactions exceeding $10,000 conducted by a single customer in a single business day.
  • Suspicious Activity Report (SAR)Must be filed within 30 days for transactions involving $5,000 or more that appear illegal or suspicious.
  • Customer Identification Program (CIP)Requires member firms to verify customer identity prior to or within a reasonable time after account opening.
  • Office of Foreign Assets Control (OFAC)Maintains the Specially Designated Nationals (SDN) list to enforce U.S. economic sanctions.

Answer

Currency Transaction Report (CTR) pairs with cash transactions exceeding 10,000;SuspiciousActivityReport(SAR)pairswithsuspicioustransactionsof10,000; Suspicious Activity Report (SAR) pairs with suspicious transactions of 5,000 or more filed within 30 days; Customer Identification Program (CIP) pairs with identity verification requirements; Office of Foreign Assets Control (OFAC) pairs with maintaining the SDN list for economic sanctions.
Each compliance term is matched to its established regulatory definition and monetary threshold under federal AML and FINRA rules.

Step-by-Step Solution

1
Identify the currency transaction reporting requirements.
CTR applies to physical cash transactions exceeding $10,000.
Bank Secrecy Act rules mandate a CTR for aggregate cash deposits or withdrawals over $10,000 in a single business day.
2
Identify suspicious activity reporting requirements.
SAR applies to suspicious transactions of $5,000 or more and must be filed within 30 calendar days.
FinCEN regulations require broker-dealers to report suspicious activity meeting or exceeding the $5,000 threshold within 30 days.
3
Identify CIP identity requirements and OFAC sanctions duties.
CIP mandates identity verification, while OFAC enforces economic sanctions via the SDN list.
Firms must verify customer identity under CIP rules and screen customers against OFAC SDN lists to comply with sanctions laws.

Key Concept

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

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