All RE5 questions
FIC Act FIC Act Compliance (CDD, AML/CFT, Reporting)
An employee reports a suspicious transaction in good faith. The client is later cleared, learns that a report was made, and sues the employee and the FSP for damages. What protection does the FIC Act give?
RE5 practice question with a worked answer. This is one of hundreds of FSCA RE5 questions in the RegulatoryExams question bank.
- a) Protection applies only if the report led to a conviction of the client.
- b) The FSP is protected, but the employee is personally liable for the report.
- c) No action lies against a person who reported in good faith.Correct
- d) There is no protection, so reports should be made only where there is proof.
Why this is the answer
A person who complies in good faith with a reporting duty under the FIC Act is protected against criminal and civil action, cannot be compelled to give evidence in criminal proceedings arising from the report, and the reporter's identity is protected. The test is suspicion held in good faith, not proof, and the outcome for the client is irrelevant.
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