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What are the Broker/Dealer Requirements for AML Compliance?
Customer-Identification Programs
- Copies of documents provided by customers must be kept if the broker relies on it for identification purposes.
- Methods and results of any additional methods taken by the broker must be recorded.
- Resolutions of any discrepancy must be recorded.
- These records must be retained for five years after the account is closed.
Behavior Detection
- Changes to standing-settlement instructions from a standard to a high-risk location.
- Parking of excess collateral, combining several complex factors, such as having cash move into an account without trade activity.
- Trade parking, where a client delivers securities to another client and buys it back in another transaction on the other side of the accounting period.
Suspicious-Activity Reporting
- Spread over many events, such as buying and selling securities, cash movements.
- Spread across many entities, including accounts, companies and households.
- Almost always spread over the same amount of time.
Source: TowerGroup