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Ch.4 · SEBI Mutual Fund Regulations · medium

Which of the following is an indicator of a potentially suspicious transaction in mutual funds?

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EXPLANATION

Structuring transactions in amounts just below reporting thresholds (₹10 lakh for CTR) is a classic money laundering red flag known as 'smurfing' or 'structuring'. This would trigger an STR filing under PMLA obligations.

A.An investor making a lump sum investment of ₹1 crore with documented source of funds

B.A series of small investments just below ₹10 lakh by the same investor [✓ Correct]

C.An investor completing KYC before placing an order

D.An investor switching from a debt fund to equity fund

EXPLANATION

Structuring transactions in amounts just below reporting thresholds (₹10 lakh for CTR) is a classic money laundering red flag known as 'smurfing' or 'structuring'. This would trigger an STR filing under PMLA obligations.

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