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

Which authority has the power to establish rules on money laundering controls in the UK?

1. The Financial Crimes Enforcement Network

2. The Securities and Exchange Commission

3. The Financial Services Authority

4. The Bank of England

The correct answer is: The Financial Services Authority

The Financial Services Authority (FSA), established in 2001, was the principal regulator responsible for overseeing and enforcing rules on money laundering controls in the UK until it was succeeded by the Financial Conduct Authority (FCA) and the Prudential Regulation Authority (PRA) in 2013. The FSA developed regulations and standards aimed at preventing money laundering and ensuring that financial institutions adhered to these rules as part of their compliance frameworks. The FSA's role encompassed the creation of guidelines for anti-money laundering practices, which included measures for customer due diligence, transaction monitoring, and reporting suspicious activities. Although the FSA itself is no longer the operating authority, its foundational role laid the groundwork for the FCA and PRA to continue and expand upon these regulatory responsibilities. The other options listed do not have the same authority or primary responsibility for setting money laundering controls in the UK. The Financial Crimes Enforcement Network (FinCEN) primarily operates in the United States, while the Securities and Exchange Commission (SEC) focuses on securities regulation. The Bank of England primarily acts as the central bank and does not engage directly in money laundering controls. Therefore, the correct association of the FSA with the establishment of money laundering rules makes it the appropriate answer in this context.