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CS Professional · IFSCA - Regulations, Listing and Compliances · Book-keeping, Accounting, Taxation and Financial Crime Compliance Services and TAS

Aarav Securities, a broker in GIFT IFSC, finds that a client's trades are structured in a way that suggests the funds may come from illegal sources. As part of its financial crime compliance programme, what should the entity do first?

The entity should escalate the matter to its designated officer, who assesses it and, if it appears suspicious, files a suspicious transaction report with FIU-India. Deleting records or alerting the client would breach record-keeping duties and the prohibition on tipping off.

  1. AIgnore the pattern until the client complains
  2. BEscalate internally to the designated officer, who assesses and, if suspicious, reports to the Financial Intelligence Unit-IndiaCorrect
  3. CClose the client's account and delete the records immediately
  4. DInform the client that an investigation has started

Explanation

Suspicious activity must be escalated to the designated or principal officer, who evaluates it and files a suspicious transaction report with FIU-IND. Deleting records breaches record-keeping duties. Telling the client is tipping off, which is prohibited.

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