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      Question

      For exposures exceeding what specific percentage of the

      eligible capital base must an institution actively investigate and identify possible connected counterparties?
      A Over 1% of the eligible capital base Correct Answer Incorrect Answer
      B Over 5% of the eligible capital base Correct Answer Incorrect Answer
      C Over 10% of the eligible capital base Correct Answer Incorrect Answer
      D Over 15% of the eligible capital base Correct Answer Incorrect Answer
      E Over 20% of the eligible capital base Correct Answer Incorrect Answer

      Solution

      To maintain robust oversight, whenever an individual counterparty's exposure value exceeds 5% of the financial institution's eligible capital base, the firm is required to proactively analyze and trace potential economic or control connections to other clients.

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