General Securities Sales Supervisor (Series10) Practice Exam

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Study for the General Securities Sales Supervisor (Series10) exam. Prepare with flashcards and multiple-choice questions, each question has hints and explanations. Get ready for your exam!

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What type of transaction must be reported to FinCEN if it exceeds the $10,000 threshold?

A stock transaction
A cash deposit or withdrawal
A bond transaction
An investment returns report

The correct answer is: A cash deposit or withdrawal

Reporting to the Financial Crimes Enforcement Network (FinCEN) is primarily focused on transactions that involve significant sums of cash, particularly to monitor and prevent money laundering and other financial crimes. A cash deposit or withdrawal exceeding the $10,000 threshold is a key indicator that may warrant reporting due to the risks associated with large cash transactions. Financial institutions are required to file a Currency Transaction Report (CTR) when a cash transaction exceeds this amount. This practice enables regulators to trace large cash movements, which could potentially be linked to illicit activities. In contrast, transactions involving stocks, bonds, or investment returns typically do not fall under the same reporting requirements with regard to cash thresholds. Such transactions, while they may have financial implications, do not necessarily involve cash amounts that trigger the same level of scrutiny by FinCEN as cash deposits or withdrawals do.