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FIC Act FIC Act Compliance (CDD, AML/CFT, Reporting)
An FSP establishes that a prospective client is a politically exposed person. What does the FIC Act require?
RE5 practice question with a worked answer. This is one of hundreds of FSCA RE5 questions in the RegulatoryExams question bank.
- a) Decline all PEPs automatically, since they may never be onboarded.
- b) Apply simplified due diligence, because PEPs are public figures.
- c) Apply no due diligence, because the PEP's status is already known.
- d) Obtain senior-management approval and apply enhanced due diligence, including establishing the source of funds and wealth.Correct
Why this is the answer
A PEP requires senior-management approval and enhanced due diligence, including establishing source of funds and wealth. Simplified or no due diligence understates the risk, and PEPs may be onboarded with EDD — they are not automatically barred.
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