What does the Model Code say about the responsibility of a broker in handling suspicious transactions?
A) Suspicious transactions should be reported by the principals.
B) Brokers need to make staff aware of the problem and exercise vigilance.
C) A broker should report any suspicions about a transaction to the other counterparty.
D) Brokers should advise clients to reject the name.

Question

Quizplus · Accepted Answer

The Model Code states that brokers need to make staff aware of the problem and exercise vigilance when handling suspicious transactions. While brokers should report suspicions to appropriate authorities, reporting them to the other counterparty could compromise an ongoing investigation. The responsibility to report suspicious transactions lies with the principals, but brokers should also be proactive in identifying and preventing these transactions. Advising clients to reject a name is not sufficient action for handling a suspicious transaction.

What Does the Model Code Say About the Responsibility of a Broker