General Securities Sales Supervisor (Series10) Practice Exam

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What holds true regarding the reporting of cash transactions with FinCEN?

Reports are not necessary for deposits under $5,000
Structure transactions that stay under $10,000 do not need reporting
A report needs to be filed if cash amounts exceed $10,000
Only withdrawals over $10,000 need reporting

The correct answer is: A report needs to be filed if cash amounts exceed $10,000

The requirement to file a report when cash amounts exceed $10,000 is rooted in the objectives of the Bank Secrecy Act (BSA), which aims to combat money laundering and other financial crimes. According to FinCEN, financial institutions are obligated to report cash transactions exceeding this threshold through the Currency Transaction Report (CTR). This regulation is in place to ensure that large cash transactions are monitored, allowing for the identification of potentially illicit activities or patterns that may suggest money laundering. The threshold of $10,000 serves as a critical benchmark, indicating that transactions above this amount warrant further scrutiny and documentation. Reporting these larger transactions helps financial institutions and authorities track and investigate unusual or suspicious financial behavior. Therefore, understanding that any cash transaction over $10,000 triggers a reporting obligation is essential for compliance with federal regulations.