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← Series 79: Section 4
Series 79 practice questioneasyAnti-Money Laundering in IB Context

Under the Bank Secrecy Act and related regulations, which of the following is a requirement for broker-dealers regarding anti-money laundering (AML)?

  1. ABroker-dealers file SARs for suspicious or potentially illegal transactions✓ Correct answer
  2. BBroker-dealers are only required to implement AML programs if they have international clients
  3. CAML compliance is optional for firms that exclusively conduct investment banking advisory activities
  4. DBroker-dealers may delegate all AML responsibilities to their clearing firm without any oversight
Explanation

Why A — Broker-dealers file SARs for suspicious or potentially illegal transactions

The Bank Secrecy Act, as amended by the USA PATRIOT Act, requires all broker-dealers to establish AML programs and file Suspicious Activity Reports (SARs) with the Financial Crimes Enforcement Network (FinCEN) when transactions appear suspicious. This obligation applies regardless of whether the firm has international clients or the nature of its business lines. Investment banking firms must be vigilant about potential money laundering through complex transaction structures, shell companies, and unusual funding sources.

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