Assume an investment dealer processes 3,500 client transactions per month. Based on industry best practices and regulatory guidance, what percentage of these transactions, at a minimum, should the firm's AML compliance officer subject to enhanced scrutiny for potential money laundering indicators, beyond automated screening?

Question: Assume an investment dealer processes 3,500 client transactions per month. Based on industry best practices and regulatory guidance, what percentage of these transactions, at a minimum, should the firm's AML compliance officer subject to enhanced scrutiny for potential money laundering indicators, beyond automated screening?

Answer options: ✅ There is no fixed percentage; scrutiny depends on risk-based assessment and red flags rather than a pre-set quota.

• Approximately 1.5% to 2% to ensure adequate oversight.
• A minimum of 5% to demonstrate proactive compliance with PCMLTFA.
• Less than 0.5%, as automated systems should catch most issues.

Correct answer: There is no fixed percentage; scrutiny depends on risk-based assessment and red flags rather than a pre-set quota.

Explanation: The PCMLTFA and FINTRAC guidance emphasize a risk-based approach to AML compliance. There is no prescribed percentage for enhanced scrutiny; rather, it should be triggered by identified risk factors, red flags, and suspicious transaction indicators, irrespective of transaction volume.