Financial Conduct Authority (FCA) UK Regulation Sample Exam

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Which act imposes anti-money laundering requirements on stockbrokers?

Financial Services Act 1986
Money Laundering Regulations 2017
Proceeds of Crime Act 2002
Criminal Justice Act 1988

The correct answer is: Proceeds of Crime Act 2002

The correct answer is the Money Laundering Regulations 2017. This legislation specifically outlines the obligations that various entities must adhere to regarding anti-money laundering (AML) practices, including stockbrokers. These regulations require firms to implement risk-based policies and procedures to identify, assess, and manage the risks of money laundering and terrorist financing. Stockbrokers, like other financial institutions, are required to conduct customer due diligence, report suspicious activities, and maintain adequate record-keeping practices to comply with the AML framework established by the regulations. While the Proceeds of Crime Act 2002 addresses the wider framework of money laundering offenses and the confiscation of the proceeds of crime, it does not directly impose the regulatory requirements on stockbrokers specifically. The Financial Services Act 1986 and the Criminal Justice Act 1988 are primarily concerned with broader financial regulations and criminal law, respectively, without setting the same direct anti-money laundering obligations as the Money Laundering Regulations 2017.