Certified Anti-Money Laundering Specialist Certification (CAMS) Practice Exam

Is the application of the Joint Money Laundering Steering Group's AML Guidance Notes mandatory?

1. Yes, for all financial institutions

2. No, they lack regulatory power

3. Yes, but only for large banks

4. No, only for private entities

The correct answer is: No, they lack regulatory power

The correct understanding is that the Joint Money Laundering Steering Group (JMLSG) generates guidance notes that serve as best practices for anti-money laundering (AML) measures. While these guidelines are recognized and highly regarded in the UK financial sector, they do not have the force of law. This means they are not mandatory or legally enforceable; rather, they provide a framework that financial institutions are encouraged to follow to comply with AML regulations. Institutions may choose to adopt these guidance notes to demonstrate compliance with their regulatory obligations, but there is no legal requirement to do so. As such, adherence is voluntary, and the JMLSG guidance is intended to complement existing regulations and enhance understanding in the industry. This is why the assertion that they lack regulatory power is accurate and reflects the nature of guidance notes in the context of money laundering prevention efforts.