Chartered Institute of Stockbrokers (CISI) Professional Practice Exam

Which of the following is NOT a requirement of the EU Money Laundering Regulations?

1. Customer due diligence

2. Record-keeping

3. Investment tracking

4. Compliance management

The correct answer is: Investment tracking

Investment tracking is not a requirement of the EU Money Laundering Regulations. The regulations primarily focus on processes that help in the identification and prevention of money laundering activities within financial transactions and services. Customer due diligence is essential as it involves verifying the identity of customers and assessing the risk they may pose. This is crucial for ensuring that financial institutions are not facilitating criminal activities. Record-keeping is another vital requirement, as financial entities must maintain thorough records of transactions and customer information to ensure transparency and to provide necessary information to authorities when required. Compliance management also plays a key role within the regulations, ensuring organizations have systems in place to detect and report suspicious activities, as well as to adhere to the legal framework outlined for combating money laundering. In contrast, while tracking investments may form part of a firm’s operational procedures or risk management strategies, it is not explicitly mandated under the EU Money Laundering Regulations like the other activities mentioned.