SIE practice questionhardOFAC
The Office of Foreign Assets Control (OFAC) maintains a list of individuals and entities subject to economic sanctions. What must a broker-dealer do when opening a new account?
- AReport all foreign customers to OFAC regardless of their nationality
- BNothing — OFAC screening is voluntary
- CScreen the customer's name against the OFAC Specially Designated Nationals (SDN) list and reject or freeze the account if there is a match✓ Correct answer
- DOnly screen customers who deposit more than $50,000
Explanation
Why C — Screen the customer's name against the OFAC Specially Designated Nationals (SDN) list and reject or freeze the account if there is a match
Broker-dealers must screen new and existing customers against OFAC's Specially Designated Nationals (SDN) list. If a match is found, the firm must block (freeze) the account and report it to OFAC within 10 business days. OFAC compliance is mandatory (not voluntary) and applies to all customers regardless of deposit amount. OFAC enforces U.S. economic sanctions against targeted foreign countries, terrorists, narcotics traffickers, and others who pose threats to U.S. national security.
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