Compliance & Account Protection Flashcards
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Terms in this set
- Regulation Best Interest The SEC standard requiring broker-dealers to act in a retail customer's best interest when recommending securities or account types, built on four obligations: disclosure, care, conflict-of-interest, and compliance — plus delivery of the Form CRS relationship summary.
- Anti-Money Laundering (AML) Programs required by the Bank Secrecy Act and USA PATRIOT Act to detect money laundering through its three stages — placement (cash enters the system), layering (transactions hide the trail), and integration (funds re-emerge clean).
- SARs & CTRs Two FinCEN filings: a Currency Transaction Report for cash transactions over $10,000 in one business day (aggregated), and a Suspicious Activity Report for transactions of $5,000 or more that look like laundering or have no business purpose.
- SIPC Coverage The Securities Investor Protection Corporation — a nonprofit funded by member firms, not a government agency — restores customer assets when a broker-dealer fails: up to $500,000 per separate customer capacity, of which at most $250,000 may be cash.
- Regulation S-P (Privacy) The SEC's privacy rule: firms must deliver a privacy notice at account opening and annually, give customers the right to OPT OUT of sharing nonpublic personal information with nonaffiliated third parties, and safeguard customer records.
- Telemarketing & Do-Not-Call Cold calls are allowed only between 8 a.m. and 9 p.m. in the PROSPECT'S local time, callers must identify themselves and their firm, and firms must honor both the national Do-Not-Call registry and their own firm-specific list.
- Customer Complaints A WRITTEN grievance from a customer (letters, email, electronic messages) alleging mishandling; firms must keep complaint records, report them quarterly to FINRA, and certain serious allegations require prompt reporting and Form U4 disclosure.