Practice question, AML program testing
Show the most recent independent test of your AML program: who performed it, how their independence and knowledge were established, what it covered and how each issue was tracked to closure.
Taft practice question: not an official regulator question. SEC Division of Examinations, United States (federal). For Broker-dealers. Evidence category: AML records.
Not legal advice. A practice prompt for rehearsing how your team explains its controls and evidence. No scoring, no model answer, no implication that a regulator will ask these words.
Authored by Taft. Last checked 2026-11-09. All questions.
Why it is relevant
A 2023 staff risk alert reported broker-dealers that could not demonstrate timely testing, tests that did not cover parts of the business or were performed by people who were not independent or lacked knowledge of the requirements, and issues from testing that were not timely addressed. The 2027 priorities list adequately conducting independent testing among the AML areas reviewed.
Sources: [1] Section I, independent testing observations, [2] Section III.D
Evidence to locate
Suggested, not mandatory. A regulator's actual request list governs.
No evidence cues listed.
Follow-up prompts
How was the scope of the test matched to changes in the business since the previous test?
Applicability
- Applies to
- Broker-dealers examined by the SEC Division of Examinations.
- Does not apply to
- Self-regulatory organization rules are not covered by this toolkit.
Cite
Cite the official source first. Then: Taft Compliance Group, Exam-prep toolkit (draft), question q-bd-aml-independent-testing, https://taftcompliance.com/resources/exam-prep-toolkit/questions/q-bd-aml-independent-testing, last checked 2026-11-09.
Sources
U.S. Securities and Exchange Commission, Division of Examinations, Risk Alert: Observations from Anti-Money Laundering Compliance Examinations of Broker-Dealers (staff statement). regulator guidance. Section I, independent testing observations, pages 3 to 4.
https://www.sec.gov/files/risk-alert-aml-compliance-examinations-bd-073123.pdf
Checked 2026-11-09; published 2023-07-31.
Supporting passage
Broker-dealers that did not conduct testing in a timely manner or could not demonstrate (for example, by a report or other documentation) that they conducted such testing. Independent tests that appeared ineffective because: they did not cover aspects of the firm's business or AML program; the personnel conducting the testing was not independent or did not have the appropriate level of knowledge of the requirements of the BSA; Broker-dealers that did not timely address, or have procedures for addressing, issues identified by independent testing.
U.S. Securities and Exchange Commission, Division of Examinations, Fiscal Year 2027 Examination Priorities (staff statement). regulator guidance. Section III.D, Anti-Money Laundering (AML), page 8.
https://www.sec.gov/files/2027-exam-priorities.pdf
Checked 2026-11-09.
Supporting passage
The Division will continue to focus on broker-dealers' AML programs and review whether broker-dealers are: (1) appropriately tailoring and updating their AML program to their business model and associated AML risks, including accounting for risks associated with omnibus accounts, particularly omnibus accounts maintained for foreign financial institutions and risks associated with significant growth in their business; (2) adequately conducting independent testing;
Changes to this question
No released changes.