Which regulatory framework governs money laundering prevention?

Which regulatory framework governs money laundering prevention?

• A. Basel III
• B. Sarbanes-Oxley Act
• C. Anti-Money Laundering (AML) regulations
• D. Dodd-Frank Act

Answer: (C)

The Anti-Money Laundering (AML) regulations specifically focus on preventing and combating money laundering activities. This regulatory framework encompasses a set of laws, regulations, and procedures that financial institutions must implement to detect and report potential money laundering activities. AML regulations require institutions to maintain stringent customer due diligence measures, monitor transactions for suspicious activity, and report such findings to authorities. Compliance with AML regulations is essential for financial institutions to mitigate their risk of being used for illegal activities, thus promoting transparency and integrity in the financial system. While Basel III, the Sarbanes-Oxley Act, and the Dodd-Frank Act address various aspects of financial regulation and oversight, they do not specifically target money laundering prevention in the same manner as AML regulations do. Basel III focuses on banking reforms aimed at improving regulation, supervision, and risk management within the banking sector. The Sarbanes-Oxley Act deals primarily with corporate governance and financial disclosures to protect investors, and the Dodd-Frank Act is centered on reforming the financial regulatory system to ensure more accountability and transparency in the financial sector. Each of these regulations has its importance but does not directly govern money laundering prevention like AML does.

The Anti-Money Laundering (AML) regulations specifically focus on preventing and combating money laundering activities. This regulatory framework encompasses a set of laws, regulations, and procedures that financial institutions must implement to detect and report potential money laundering activities. AML regulations require institutions to maintain stringent customer due diligence measures, monitor transactions for suspicious activity, and report such findings to authorities. Compliance with AML regulations is essential for financial institutions to mitigate their risk of being used for illegal activities, thus promoting transparency and integrity in the financial system.

While Basel III, the Sarbanes-Oxley Act, and the Dodd-Frank Act address various aspects of financial regulation and oversight, they do not specifically target money laundering prevention in the same manner as AML regulations do. Basel III focuses on banking reforms aimed at improving regulation, supervision, and risk management within the banking sector. The Sarbanes-Oxley Act deals primarily with corporate governance and financial disclosures to protect investors, and the Dodd-Frank Act is centered on reforming the financial regulatory system to ensure more accountability and transparency in the financial sector. Each of these regulations has its importance but does not directly govern money laundering prevention like AML does.