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FIC Act FIC Act Compliance (CDD, AML/CFT, Reporting)
Busi works at an accountable institution and is asked to apply 'ongoing due diligence' to an existing client relationship. What does this mean under the FIC Act?
RE5 practice question with a worked answer. This is one of hundreds of FSCA RE5 questions in the RegulatoryExams question bank.
- a) Monitoring the relationship and transactions over time, and keeping client information current, to ensure activity stays consistent with what is known about the client.Correct
- b) Verifying the client once at onboarding and never reviewing the relationship again.
- c) Only acting if the police request information about the client.
- d) Closing every account after twelve months regardless of activity.
Why this is the answer
Ongoing due diligence requires monitoring transactions and the relationship over its life, and keeping CDD information up to date, so the institution can detect activity inconsistent with the client's known profile. It is continuous, not a once-off onboarding step.
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