Series 7 Exam Question 184: Answer and Explanation

Question: 184

All broker-dealers need to maintain customer identification programs and should check the names of all new clients against

• A. a list maintained by the SEC
• B. a do-not-call list maintained by the firm
• C. a list compiled by FINRA
• D. a list of specially designated nationals (SDNs) maintained by OFAC

Correct Answer: D

Explanation:

D. The Bank Secrecy Act establishes the U.S. Treasury Department as the regulator of anti-money-laundering programs. As such, all broker-dealers are required to have programs set up to help detect the possibility of money laundering. Broker-dealers must also review the OFAC's (Office of Foreign Asset Control's) SDN (Specially Designated Nationals) list to determine that they're not doing business with organizations or individuals that are on the list.