Understanding Trading, Customer Accounts and Prohibited ActivitiesDifficulty 3/5
A registered representative notices a pattern of transactions with no apparent lawful purpose. Which report does this call for?
- AA Currency Transaction Report, which is filed because of the nature of the activity
- BAn OFAC blocking report, which is filed because of the nature of the activity
- CA Form U4 amendment, which is filed because of the nature of the activity
- DA Suspicious Activity Report, which is filed because of the nature of the activity
Show answer and rationale
Correct: D. The SAR is triggered by suspicion; for a broker-dealer it is mandatory when the activity involves at least $5,000, and voluntary below that. The CTR is triggered mechanically by a currency threshold, whether or not anything looks wrong.
- A — A CTR is driven by a currency amount threshold, not by whether the activity looks suspicious.
- B — OFAC reporting concerns blocked persons on the SDN list, not suspicious transaction patterns.
- C — Form U4 reports the representative's own registration information, not customer activity.