Series 79 practice questionmediumAnti-Money Laundering in IB Context
Which of the following best describes the purpose of Customer Identification Program (CIP) procedures in an investment banking context?
- AVerify identity before account opening✓ Correct answer
- BTo calculate underwriting fees for a public offering
- CTo determine research report eligibility
- DTo approve bank loans to clients
Explanation
Why A — Verify identity before account opening
CIP procedures are designed to ensure a firm verifies its customers' identities before conducting business, which is key in preventing money laundering. The other options are unrelated to AML and serve as common traps.
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