FRM Part II · FRM Exam Part II · Sound Management of Risks Related to Money Laundering and Financing of Terrorism
A group compliance function wants to design its information-sharing framework for ML/FT risk. Which design best reflects BCBS expectations for group-wide risk management?
The best design lets group compliance, audit and AML functions obtain customer, account and transaction information from branches and subsidiaries as needed, with safeguards for confidentiality and use. Aggregate-only or post-filing sharing is too limited for effective group-wide ML/FT risk management.
- AEach subsidiary maintains its own customer risk profiles and shares only aggregate statistics annually
- BGroup-level compliance, audit and AML functions can obtain customer, account and transaction information from branches and subsidiaries when needed, subject to adequate safeguards on confidentiality and useCorrect
- COnly the parent's board receives information, and compliance staff have no access to branch data
- DInformation is shared only when a suspicious transaction report has already been filed with the local FIU
Explanation
The guidelines call for group-wide access to information needed for ML/FT risk management, with confidentiality and use safeguards. Annual aggregates or sharing only after an STR filing is too limited to support group-level risk assessment.
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