Finra
A Suspicious Activity Report (SAR) should be filed when:
SAR = suspicious activity. CTR = cash over $10,000. Both are AML tools.
Complete Analysis & Legal Rationale
A SAR must be filed when a firm suspects money laundering, terrorist financing, or other illegal activity. Unlike CTRs, SARs require a judgment that activity is suspicious, not just a dollar threshold.
Distractor Autopsy (Why Other Options Are Traps)
FINRA exam writers design incorrect distractors using specific calculation mistakes and regulatory misconceptions. Review why each option succeeds or fails:
Cash deposits over $10,000 trigger a CTR, not necessarily a SAR.
Matches the verified teaching point in the explanation.
Opening a margin account is routine and does not require a SAR.
First purchases are normal activity and do not require a SAR.
Official Standard: Requires AML programs consistent with Bank Secrecy Act obligations (verify current text).
Official Standard: Outline-level citation pending rule-specific upgrade. Verify against current FINRA Series 7 outline.