Industry-Specific Risk Appetite Analysis

C

The correct answer for this question is option C: obtain sufficient customer information to understand the nature and purpose of customer relationships for the purpose of developing a customer risk profile.

To comply with anti-money laundering (AML) regulations, financial institutions are required to have a risk-based approach to identifying and managing money laundering risks. This approach involves the development of a customer risk profile, which is created by obtaining sufficient customer information to understand the nature and purpose of customer relationships.

The risk profile is used to assess the level of risk associated with a customer or transaction and to determine the appropriate level of due diligence required. This due diligence includes monitoring transactions, identifying suspicious activity, and reporting any suspicious activity to relevant authorities.

Option A pertains to the requirements for obtaining information for non-customers who purchase monetary instruments, such as currency exchange or money orders, and is not relevant to this question.

Option B relates to obtaining beneficial ownership information for legal entity customers, which is necessary for identifying the individuals who ultimately control and benefit from the account. While this is important for identifying money laundering risks, it does not specifically address the question of assessing whether a customer's activities align with the FI's risk appetite for a specific industry segment.

Option D describes basic customer identification requirements for opening an account, which are necessary to establish the customer's identity and comply with customer due diligence regulations. However, this requirement alone does not provide sufficient information to understand the nature and purpose of the customer relationship in order to develop a risk profile.

Therefore, option C is the correct answer as it specifically addresses the need to obtain sufficient customer information to develop a risk profile and assess whether a customer's activities align with the FI's risk appetite for a specific industry segment.