NISM Series XXIV Practice Questions - NISM Series XXIV AML And CFT Provisions In Securities Markets Certification Examination Exam

Why is the layering stage of money laundering particularly difficult to detect in the securities market?

Depositing physical cash directly into stock exchange trading terminals is very common. Securities transactions are exempt from Know Your Customer (KYC) norms. The high liquidity, speed of transaction execution, and volume of electronic trading make it easy to mask audit trails. The Enforcement Directorate does not have jurisdiction over securities transactions.

Correct Answer:

The high liquidity, speed of transaction execution, and volume of electronic trading make it easy to mask audit trails.

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