Test Your NISM-Series-24: AML and CFT Provisions in Securities Markets Mock Tests Knowledge in 5 Minutes

1. Which authority in India leads investigations involving the offence of money-laundering?

A. Central Bureau of Investigation B. Directorate of Enforcement C. Financial Intelligence Unit – India D. Reserve Bank of India

2. Which of the following actions best describes how criminals perform money laundering?

A. Hiding the original source of illegal money B. Converting illegal money into another form C. Transferring illegal profits to different places D. All of the above

3. Why are Anti-Money Laundering (AML) laws essential for a country?

A. They allow criminals to enjoy illegal profits B. They weaken financial institutions C. They have little impact on society D. They help stop criminals from hiding illegal earnings

4. What is the stage called when illegal money is first introduced into the financial system?

A. Integration B. Extraction C. Placement D. Layering

5. Which organization is responsible for receiving and analyzing suspicious financial transaction reports in India?

A. RBI B. IRDAI C. FIU-IND D. SEBI

6. The Prevention of Money Laundering Act (PMLA) and its related rules became effective from which date?

A. July 1, 2002 B. July 1, 2005 C. Both A and B D. None of the above

7. Under which section of the PMLA is the offence of money laundering defined?

A. Section 4 B. Section 5 C. Section 3 D. Section 2

8. According to Section 4 of PMLA 2002, what is the imprisonment period for the offence of money laundering?

A. 3–7 years B. 3–4 years C. 4–5 years D. None of the above

9. As per Section 12 of the PMLA, what responsibilities must reporting entities fulfill?

A. Provide transaction information to the Director B. Keep records of client identity C. Maintain records of financial transactions D. All of the above

10. After a law is passed, why are rules created for that law?

A. To describe how the law will operate in practice B. To explain how the law will be implemented C. To allow flexibility in applying the law D. All of the above