Chapter 15 - Compliance Considerations Flashcards
Broker-dealers must verify the identity of each customer within a reasonable period of time from the account opening due to:
terrorism and/or money laundering
The three stages of money laundering are:
Placement, layering, and integration
Broker-dealers must verify the identity of a customer:
within a reasonable period of time to opening an account.
Establishes rules to protect the privacy of clients’ confidential information.
Regulation SP
A privacy notice must be provided to clients when _____ and _____.
opening the account; annually thereafter
Requires financial institutions to create policies to detect identity theft.
FTC Red Flag Rules
Communication that’s distributed to 25 or fewer retail investors within a 30-calendar-day period.
Correspondence
Customer proceeds that have not been withdrawn or reinvested.
Free credit balance
Written or electronic communication that is distributed or made available only to institutional investors.
Institutional communication
A customer that has made an unsolicited inquiry or effected a transaction with the firm is known as a(n):
establish customer
If a firm acts in an agency capacity, the _____ must be disclosed on a confirmation.
commission
What form must be filed by a broker-dealer employee who believes that a check has been tampered with or forged?
A Suspicious Activity Report
When a customer deposits or transfers assets below the reporting thresholds in an attempt to avoid detection.
Structuring
The process for communicating with regulators and mission-critical systems required to continue business are in:
the broker-dealers continuity plan
Under Regulation SP, a _____ is someone who gives nonpublic, personal information to a broker-dealer that may result in trades
consumer
