Which of the following customers may be exempted under Phase II of the Bank Secrecy Act?
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A. B. C. D.C
Under Phase II of the Bank Secrecy Act (BSA), also known as the Anti-Money Laundering (AML) program, financial institutions are required to establish and maintain an effective AML program to detect, prevent and report suspicious activities related to money laundering, terrorism financing, and other illegal activities.
Regarding customer exemptions under Phase II of the BSA, the regulation provides specific categories of customers that may be exempted from the program, as long as certain conditions are met. These categories include:
A. Government agencies: Any federal, state or local government agency is exempt from the program. However, the exemption only applies to the government agency itself and not to any individuals or entities associated with it.
B. Correspondent banks: A correspondent bank is a financial institution that provides services to another financial institution, such as wire transfers, foreign currency exchange, or check clearing. If the correspondent bank is regulated by a federal or state agency, it may be exempt from the program, but only if it has its own AML program in place that meets the regulatory requirements.
C. Payroll customers: Financial institutions may exempt certain payroll customers, such as employees of the financial institution or its affiliates, from the program. However, the exemption only applies to the customers' payroll transactions and not to any other transactions they may conduct.
D. Businesses whose stocks are traded on a national stock exchange: This exemption applies only to certain publicly traded companies, such as those listed on the New York Stock Exchange or NASDAQ. However, the exemption only applies to the company's publicly traded securities and not to any other transactions it may conduct.
In summary, the correct answer to the question is A. Government agencies, as they are explicitly exempted from the AML program under Phase II of the Bank Secrecy Act. None of the other options can be automatically exempted without meeting the regulatory requirements for exemptions.