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Question 1 of 10
1. Question
Which of the following statements is true regarding Rule 17a-8 of the Securities Exchange Act of 1934?
Correct
Under Rule 17a-8 of the Securities Exchange Act of 1934, brokers and dealers are required to comply with the reporting, record keeping, and record retention requirements set forth by the Bank Secrecy Act, the goal of which is to prevent and detect money laundering and other illegal financial activities.
Incorrect
Under Rule 17a-8 of the Securities Exchange Act of 1934, brokers and dealers are required to comply with the reporting, record keeping, and record retention requirements set forth by the Bank Secrecy Act, the goal of which is to prevent and detect money laundering and other illegal financial activities.
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Question 2 of 10
2. Question
Which of the following is one of the requirements of Rule 17a-8 of the Securities Exchange Act of 1934?
Correct
Under Rule 17a-8 of the Securities Exchange Act of 1934, brokers and dealers are required to comply with the reporting, record keeping, and record retention requirements set forth by the Bank Secrecy Act, the goal of which is to prevent and detect money laundering and other illegal financial activities. One such requirement of the Bank Secrecy Act is that brokers and dealers must implement Customer Information Programs that are designed to verify the identity of their customers, collect and maintaining information necessary to identify their customers, and determine whether customers appear on any government published lists of known or suspected terrorist organizations. Additionally, brokers and dealers ought to follow the training programs for educating employees on how to identify suspicious activity in customer’s accounts and how to report such suspicious behavior to the proper governmental authorities, such as through Suspicious Activity Reports (SARs).
Incorrect
Under Rule 17a-8 of the Securities Exchange Act of 1934, brokers and dealers are required to comply with the reporting, record keeping, and record retention requirements set forth by the Bank Secrecy Act, the goal of which is to prevent and detect money laundering and other illegal financial activities. One such requirement of the Bank Secrecy Act is that brokers and dealers must implement Customer Information Programs that are designed to verify the identity of their customers, collect and maintaining information necessary to identify their customers, and determine whether customers appear on any government published lists of known or suspected terrorist organizations. Additionally, brokers and dealers ought to follow the training programs for educating employees on how to identify suspicious activity in customer’s accounts and how to report such suspicious behavior to the proper governmental authorities, such as through Suspicious Activity Reports (SARs).
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Question 3 of 10
3. Question
Which of the following statements is one of the purposes of Regulation S-P?
Correct
Regulation S-P (Privacy of Consumer Financial Information) contains at its core three main purposes or functions:
1.The regulation requires financial institutions to notify its customers of its privacy practices
2.The regulation prohibits financial institutions from disclosing nonpublic personal customer information to third parties, unless the institution has disclosed its practices to the customer and the customer has failed to opt out of such disclosure
3.The regulation provides certain industry standards for financial institutions regarding privacy practices and disclosure of customer information.Incorrect
Regulation S-P (Privacy of Consumer Financial Information) contains at its core three main purposes or functions:
1.The regulation requires financial institutions to notify its customers of its privacy practices
2.The regulation prohibits financial institutions from disclosing nonpublic personal customer information to third parties, unless the institution has disclosed its practices to the customer and the customer has failed to opt out of such disclosure
3.The regulation provides certain industry standards for financial institutions regarding privacy practices and disclosure of customer information. -
Question 4 of 10
4. Question
Which of the following statements is one of the exceptions of Regulation S-P to the disclosure and privacy policies?
Correct
There are exceptions to the ability of the customer to opt-out of the sharing of personal nonpublic information, when the institution must share that information with a third party in order to effect transactions on behalf of the customer or servicing a customer’s products and accounts.
Incorrect
There are exceptions to the ability of the customer to opt-out of the sharing of personal nonpublic information, when the institution must share that information with a third party in order to effect transactions on behalf of the customer or servicing a customer’s products and accounts.
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Question 5 of 10
5. Question
What is the importance of USA PATRIOT act?
Correct
The PATRIOT Act was established for all forms of business following the terrorist attacks of September 11, 2001. The PATRIOT act was established to help businesses, especially financial institutions, prevent funneling of funds to terrorist organizations.
Incorrect
The PATRIOT Act was established for all forms of business following the terrorist attacks of September 11, 2001. The PATRIOT act was established to help businesses, especially financial institutions, prevent funneling of funds to terrorist organizations.
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Question 6 of 10
6. Question
Which of the following statements is true regarding USA PATRIOT act?
Correct
The PATRIOT Act was established for all forms of business following the terrorist attacks of September 11, 2001. The PATRIOT act was established to help businesses, especially financial institutions, prevent funneling of funds to terrorist organizations. The PATRIOT Act requires that financial institutions establish and maintain a customer information program (or CIP). The minimum required information for collection for CIPs consists of the customer’s name, address, social security number, and date of birth. Per the requirements of the USA PATRIOT Act, it is the responsibility of the FINRA member opening a new account to confirm that the customer is who they say they are (usually via some form of government issued identification), retain the method used to determine the customer’s identity, and ensure that the person is not on the Office of Foreign Assets Control (OFAC) list.
Incorrect
The PATRIOT Act was established for all forms of business following the terrorist attacks of September 11, 2001. The PATRIOT act was established to help businesses, especially financial institutions, prevent funneling of funds to terrorist organizations. The PATRIOT Act requires that financial institutions establish and maintain a customer information program (or CIP). The minimum required information for collection for CIPs consists of the customer’s name, address, social security number, and date of birth. Per the requirements of the USA PATRIOT Act, it is the responsibility of the FINRA member opening a new account to confirm that the customer is who they say they are (usually via some form of government issued identification), retain the method used to determine the customer’s identity, and ensure that the person is not on the Office of Foreign Assets Control (OFAC) list.
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Question 7 of 10
7. Question
Which of the following statements is true regarding the Bank Secrecy Act?
Correct
The Bank Secrecy Act, also known as the Currency and Foreign Transactions Reporting Act of 1970, serves to assist the United States government in uncovering and preventing illegal financial activities such as money laundering. Under the act, financial institutions in the United States are required to report and to maintain records for all cash transactions occurring in a single day in excess of $10,000.
Incorrect
The Bank Secrecy Act, also known as the Currency and Foreign Transactions Reporting Act of 1970, serves to assist the United States government in uncovering and preventing illegal financial activities such as money laundering. Under the act, financial institutions in the United States are required to report and to maintain records for all cash transactions occurring in a single day in excess of $10,000.
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Question 8 of 10
8. Question
Which of the following statements is one of the information to be retained by the sender’s financial institution, under the Bank Secrecy Act?
Correct
Under the Bank Secrecy Act, which is designed to prevent and detect money laundering and other illegal financial activities, financial institutions are required to collect certain data on the sender and recipient of funds for certain transactions.
The information to be retained by the sender’s financial institution includes:
1.Name and address of the sender
2.Amount that was sent
3.Execution date of the transaction
4.Payment instructions provided by sender
5.Identity of recipient’s financial institution.Incorrect
Under the Bank Secrecy Act, which is designed to prevent and detect money laundering and other illegal financial activities, financial institutions are required to collect certain data on the sender and recipient of funds for certain transactions.
The information to be retained by the sender’s financial institution includes:
1.Name and address of the sender
2.Amount that was sent
3.Execution date of the transaction
4.Payment instructions provided by sender
5.Identity of recipient’s financial institution. -
Question 9 of 10
9. Question
Which of the following is one of the information for the recipient, under the Bank Secrecy Act?
Correct
The information for the recipient includes:
1.Name and address of the recipient
2.Account number of the recipient
3.Any other specific identifiers of the recipient.Incorrect
The information for the recipient includes:
1.Name and address of the recipient
2.Account number of the recipient
3.Any other specific identifiers of the recipient. -
Question 10 of 10
10. Question
What is the importance of required information on the sender and recipient of funds, under the Bank Secrecy Act?
Correct
These requirements are important because they require the financial institutions to gather relevant data that may assist them in uncovering and prevent illegal financial activities. They also create a paper trail that can assist in future investigations, if necessary.
Incorrect
These requirements are important because they require the financial institutions to gather relevant data that may assist them in uncovering and prevent illegal financial activities. They also create a paper trail that can assist in future investigations, if necessary.