Scenario 5: When can a mutual fund representative typically accept cash directly from a client for investment?

Question: Scenario 5: When can a mutual fund representative typically accept cash directly from a client for investment?

Answer options:

• Always, if the amount is small.
• Only if the client signs a waiver. ✅ Never, as it is a prohibited practice to prevent money laundering and fraud.
• If the branch manager approves it in writing.

Correct answer: Never, as it is a prohibited practice to prevent money laundering and fraud.

Explanation: Accepting cash directly from clients for investment is generally a prohibited practice for mutual fund representatives due to anti-money laundering regulations and the risk of fraud or theft. Payments should be made directly to the fund company or dealer by cheque or electronic transfer. The correct answer is "Never, as it is a prohibited practice to prevent money laundering and fraud.". This capacity-fill scenario 5 reinforces the same competency for the ific bank and follows the certified explanation standard.