- •Compliance Sample Questions – Final Exam
- •1. Briefly explain financial stability and its importance to shareholders, depositors, taxpayers etc.!
- •2. Briefly explain goals, tasks and enforcement powers of banking supervisors!
- •3. Briefly give an overview of the European and the Austrian banking supervisors: Name them Their roles and tasks Cooperation between European and Austrian banking supervisors
- •4. Briefly explain the function of the Banking Union and the Single Resolution Mechanism (srm/ssm)!
- •5. Briefly explain significant banks and name some of Austrian significant banks!
- •6. Briefly explain the system of the Austrian (national) banking supervision system!
- •7. Name and briefly explain the roles of external banking supervisors and internal control authorities (within banks)!
- •9. Briefly explain the role of Compliance within a bank:
- •10. Briefly explain the Standard Compliance Code!
- •11. Name essential aspects/topics regulated in the Compliance Manual!
- •8. Briefly explain the 3 lines of defense!
- •12. What are areas of confidentiality? What is the function of them?
- •13. What is understood by compliance relevant information?
- •14. What is understood by insider trading and/or market manipulation?
- •Insider trading:
- •15. Explain the Watch List and the Restricted List!
- •16. Briefly explain Front Running!
- •17. What does a bank employee have to do in case of knowledge of compliance relevant information?
- •18. Briefly explain the tasks of a bank employee in case of employee transactions (he/she wishes to trade securities)!
- •19. What are the tasks of bank employees who work in areas of confidentiality in case of employee transactions (he/she wishes to trade securities)!
- •24. Briefly explain different types of corruption!
- •25. Why is it important to know if a person is engaged in the private sector or if a person is a public official (in the context of combating corruption)?
- •26. How are banks combating corruption? Why and what are there different internal regulations in case private sector or public officials?
- •27. Briefly explain Money Laundering and Terrorism Financing!
- •28. Briefly explain the 3 steps of Money Laundering!
- •29. Briefly explain some of the risks factors in order to identify Money Laundering and/or Terrorism Financing!
- •34. Name situations when a Know-Your-Customer (kyc) check is not necessary!
- •35. Briefly explain prohibited business relations!
- •36. What are the main tasks of the money laundering officer within a bank?
- •37. Give a detailed overview of steps/requirements by a bank employee in order to fulfill the rules of conduct (§ 38-62 ssa)!
- •38. Which information a bank is to give to its customers to fulfill the rules of conduct?
- •39. Explain the different customer definitions and explain the consequences of the customer classification in order to fulfill the rules of conduct!
- •40. For which customers a bank must prepare a customer profile? Which information does a bank employee need to prepare the customer profile? What are the consequences of a customer profile?
- •41. Explain the differences of transactions requiring advisory/clarification and transactions without advisory/clarification!
- •42. Briefly explain the requirements for the execution of orders by retail customers? What is understood by Best-Execution-Policy?
- •43. Is doorstep selling allowed in Austria?
- •44. Explain and give examples of essential risks regulated in the ssa (in context with securities business)!
- •45. Explain essential differences of the roles and tasks of internal auditors and external auditors!
- •Internal Audit
- •46. Name essential stakeholders of the internal audit function! Explain the interaction between them and the internal audit function!
- •47. Briefly explain the steps of audit planning (internal audit): Risk based planning versus mandatory audit fields!
- •48. Briefly explain Material Misstatement and possible consequences thereof!
- •49. Explain Audits risks and how external auditors can mitigate them!
- •50. Explain the 4 types of (external) Audit Opinions! Which type do banks require for assessing the credit risks of customers?
34. Name situations when a Know-Your-Customer (kyc) check is not necessary!
KYC is generally required for natural persons and legal entities.
But f.e. at savings in school or quick ATM functions a KYC check is not necessary and no identification is needed.
Anonymous accounts and taking of anonymous saving books don’t need any KYC check, but are part of prohibited business relations, which are not allowed according to the Austrian Banking Act.
35. Briefly explain prohibited business relations!
Prohibited business relations: § _40d Austrian Banking Act Shell bank/Bank in a country without physical presence
Anonymous accounts (no KYC performed)
Taking of anonymous saving books (no KYC performed)
Suspicion of: Transactions/Business Relations in context with Illegal actions
Terroristic/criminal groups
Assets from Illegal actions
Terroristic/criminal groups
Violation of disclosure of trusts, escrow accounts
Reporting not disclosed to customer
In such cases the bank worker is expected to contact a supervisor within 24 hours and report the prohibited business. If the action is a transaction, the bank worker should not do the transaction and observe the account for further suspicious.
36. What are the main tasks of the money laundering officer within a bank?
Tasks of the Money Laundering Officer:
Internal/external contact person
Preparation of risk analyses
Implementation and further development of proper strategies, procedures and IT systems
Implementation and further development of a Money Laundering Manual (part of Compliance Manual if CO is Money Laundering Officer)
Definition/Implementation of measures in context with increased duties of care Monitoring of high risk transactions/business relations that require increased duties of care
Reporting of suspicious risk transactions/business relations to supervisor
Reporting to Board of Management
Training of employees
Stop/approval of suspicious transactions
Handling of suspicious business relations
37. Give a detailed overview of steps/requirements by a bank employee in order to fulfill the rules of conduct (§ 38-62 ssa)!
· General Obligations
o honest, fair and professional behaviour in accordance with the best interest of the client
· Adequate Information about:
o Services and Transactions (Explanation, Comparison, Major Changes, Assessment Processes)
o Portfolio Management
o Type of Financial Instruments
o Costs and charges
o Proposed investment strategies
o Execution venues
o Risks by a financial instrument with client classifications
o About the agreement
· Marketing Communication must be in line with the above mentioned aspects
o Indication of benefits together with the risks
o No misleading Information
· Requirements of fair, clean and non-misleading communication
o Name and firm of the LE must be included
o Not naming and authority by the approval of products
· Suitability and adequacy of investment services
o Information about the clients knowledge and experience regarding services
o Type of the respective client and her/his transactions and services
· Suitability of investment advice and portfolio management services
o Collecting information regarding the clients and her/his knowledge and experience regarding the financial instrument
o Information about the client’s income (source and amount)
o Information about the time horizon for which the client wants to hold the investment, about the risks and about the investment objectives
· Documentation of the parties’ rights and duties
o Documentation of the agreement
· Reporting Obligations of the LE to its clients
o In respect of Portfolio Management
o Other execution orders
o Financial Instruments
o Client Funds
· Best Execution of Services
· Implementation of Processes in order to ensure the adequate handling of client orders
· Aggregation and Allocation of orders
· Information regarding client rating
· Compliance of the Austrian telecommunication regulation and other regulations in accordance to
o unsolicited communications and
o door-to-door sales