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FIC Act FIC Act Compliance (CDD, AML/CFT, Reporting)
A representative is unsure whether a new client is a domestic prominent influential person: the client is the chief financial officer of a large metropolitan municipality. What is the right approach?
RE5 practice question with a worked answer. This is one of hundreds of FSCA RE5 questions in the RegulatoryExams question bank.
- a) Establish his status under the FSP's procedures and apply the required measuresCorrect
- b) Refuse the client, because anyone in local government must be turned away
- c) Assume he is not one, because municipal officials are never prominent persons
- d) Ask the client to confirm in writing that he is not a prominent person
Why this is the answer
The FSP's risk-based procedures must establish whether a client is a prominent influential person; senior municipal officials can be. If he is, the FSP must assess the risk and apply enhanced measures where it is high. Relying on the client's own denial, or refusing everyone in local government, is not the risk-based approach.
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