MLRO Quiz: Test Your Financial Crime Knowledge
Fifteen questions for MLROs, deputies and anyone preparing for a financial crime role: suspicious activity reports, the nominated officer, customer due diligence, sanctions and the MLRO’s accountability. Reveal each answer as you go.
How This Quiz Works
There are 15 questions on the MLRO role and financial crime. Most are multiple choice. Read each question, choose your answer, then select Show answer to see the correct answer, a short explanation and a link to the full guide. Keep a note of your score and check it against the guide at the end.
The questions reflect the FCA rules as we understand them, including the 2026 changes to the Senior Managers and Certification Regime. They are a learning aid, not an official FCA test, and nothing here is legal advice.
Running a training session? Download this quiz as a Word document, with the questions first and the answers on a separate page.
This quiz is part of our SMCR quiz series:
Reporting Suspicion
The nominated officer’s core legal duties.
Question 1
Who receives internal suspicious activity reports from staff?
- The compliance officer
- The nominated officer
- The chief executive
- Internal audit
Show answer
Answer: B, the nominated officer. The Money Laundering Regulations require a nominated officer to receive internal reports and decide whether to report to the National Crime Agency. In most firms this is the MLRO.
Read more: SARs and the nominated officer
Question 2
Where are suspicious activity reports submitted?
- The FCA
- HM Revenue and Customs
- The National Crime Agency
- The Financial Ombudsman Service
Show answer
Answer: C, the National Crime Agency. SARs go to the UK Financial Intelligence Unit within the National Crime Agency.
Read more: SARs and the nominated officer
Question 3
Telling a customer that a SAR has been made about them may be which offence?
- Market abuse
- Tipping off
- Bribery
- Misrepresentation
Show answer
Answer: B, tipping off. Disclosing that a report has been made, in a way likely to prejudice an investigation, can be the offence of tipping off under the Proceeds of Crime Act.
Read more: SARs and the nominated officer
Question 4
What is a DAML request?
- A request to close an account
- A request for a defence against money laundering before proceeding with a transaction
- A data access request
- An annual MLRO report
Show answer
Answer: B. Where a firm suspects property is criminal, it can ask the NCA for a defence against money laundering before proceeding. The NCA then has a set notice period to respond.
Read more: SARs and the nominated officer
Question 5
Must the MLRO and the nominated officer be the same person?
- Yes, by law
- No, but they usually are
- Only in banks
- Only if the firm has more than 100 staff
Show answer
Answer: B. The roles are distinct, but most firms give both to the same person, with an alternate for absences.
Read more: Do you need a deputy MLRO?
Customer Due Diligence
Knowing who your customers are, and keeping the evidence.
Question 6
Which customers require enhanced due diligence?
- All customers
- Politically exposed persons and other higher-risk situations
- Only corporate customers
- Only customers outside the UK
Show answer
Answer: B. Enhanced due diligence applies to higher-risk situations, including politically exposed persons and certain high-risk third countries, and wherever the firm’s risk assessment calls for it.
Read more: CDD and EDD explained
Question 7
What is the difference between source of funds and source of wealth?
- There is no difference
- Source of funds is where the money for a transaction comes from; source of wealth is how the customer built their overall wealth
- Source of wealth only applies to companies
- Source of funds only applies to cash
Show answer
Answer: B. Both matter for higher-risk customers. Source of funds looks at the specific money; source of wealth at the customer’s total wealth.
Read more: CDD and EDD explained
Question 8
How long must customer due diligence records normally be kept after a business relationship ends?
- One year
- Three years
- Five years
- Indefinitely
Show answer
Answer: C, five years. The Money Laundering Regulations require records to be kept for five years after the relationship ends, subject to limited exceptions.
Read more: CDD and EDD explained
Question 9
Which document assesses the money laundering risks across the whole firm?
- The annual MLRO report
- The business-wide risk assessment
- The customer risk assessment
- The compliance monitoring plan
Show answer
Answer: B. The Money Laundering Regulations require a written business-wide risk assessment, which shapes the firm’s policies and controls.
Read more: The business-wide risk assessment
The MLRO Role
Accountability, reporting and resourcing.
Question 10
Who should receive the MLRO’s annual report?
- The FCA
- The board or senior management
- Only the compliance officer
- The external auditor
Show answer
Answer: B. The annual MLRO report tells the board how the firm’s anti-money laundering systems and controls are working, and what needs to change.
Read more: The annual MLRO report
Question 11
Is the MLRO of an authorised payment institution an SMF17?
- Yes
- No
- Only if it has more than 10 staff
- Only if it is also an e-money institution
Show answer
Answer: B, no. Payment and e-money institutions are not within the SMCR in the same way as FSMA firms, so their MLRO is not an SMF17, though the role is assessed closely.
Read more: MLRO for payments and e-money firms
Question 12
Who administers UK financial sanctions?
- The FCA
- OFSI, part of HM Treasury
- The National Crime Agency
- The Bank of England
Show answer
Answer: B, OFSI. The Office of Financial Sanctions Implementation, part of HM Treasury, administers UK financial sanctions and receives reports of breaches.
Read more: Sanctions screening and compliance
Question 13
Can an MLRO be fractional?
- No, never
- Yes, with a named alternate and enough time for the firm’s risks
- Only at banks
- Only during authorisation
Show answer
Answer: B. Fractional MLROs are common at smaller firms. The key is enough time and a clear alternate for internal reports on non-working days.
Read more: Fractional MLRO recruitment
Question 14
As transaction volumes grow at a payments firm, what usually changes?
- Nothing
- The MLRO role is split from compliance, and a deputy and analysts are added
- The MLRO role is outsourced entirely
- The firm stops screening
Show answer
Answer: B. Growth usually brings a dedicated MLRO, a deputy and a team. Responsibility cannot be outsourced.
Read more: Sizing the financial crime team
Question 15
Which Prescribed Responsibility relates most directly to financial crime?
- Responsibility for the firm’s financial crime policies and procedures
- Responsibility for the remuneration policy
- Responsibility for client money
- Responsibility for whistleblowing
Show answer
Answer: A. Core and Enhanced firms allocate a Prescribed Responsibility for countering the risk of the firm being used for financial crime. It is often, but not always, given to the MLRO.
Read more: Prescribed Responsibilities explained
How Did You Do?
Count your correct answers out of 15.
- 12 or more: Strong. Try the compliance officer quiz next.
- 7 to 11: A good base. Our guide to SARs and the nominated officer covers the detail.
- Fewer than 7: Start with the MLRO role explained, then try again.
More Quizzes in the Series
Each quiz in the series tests a different part of the regime. Work through them in any order.
From Quiz to Appointment
If your firm needs an MLRO, a deputy or a financial crime team, we recruit on a permanent, interim and fractional basis.
Related Services and Guides
From knowledge to appointment. Every search is run by our specialist team, with Adrian Lawrence FCA overseeing each mandate
Fractional Cover
SMF16 and SMF17, part of the week.
→ Fractional compliance officer → Fractional MLROFractional and interim SMF cover →
Compliance Leaders
Permanent compliance and MLRO hires.
→ CCO and head of compliance → Combined SMF16/17Compliance officer (SMF16) →
Resources
Guides, templates and pay data.
→ Knowledge Centre → Free guides and templatesAll resources →
Candidates
For current and future Senior Managers.
→ Live SMF jobs → Register as a candidateCandidate resources →
Every search is run by our specialist team, with Adrian Lawrence FCA overseeing each mandate
Frequently Asked Questions
Is this an official AML exam?
No. It is a learning aid. For formal qualifications, look at the ICA and ACAMS programmes.
Does every regulated firm need an MLRO?
Firms within the Money Laundering Regulations need a nominated officer and, where appropriate, a senior person responsible for compliance with the regulations. Under the SMCR, the MLRO of a relevant firm holds SMF17.
Can I use this quiz for training?
Yes, it works well as a refresher alongside your firm’s own financial crime training.
About the Author
Adrian Lawrence FCA is the founder of SMF Capital. He is a Chartered Accountant and Fellow of the ICAEW, holds a practising certificate in his own name, and is a former listed-company Finance Director with a BSc from Queen Mary College, University of London. He founded FD Capital in 2018 and has since built a network of five specialist recruitment practices. He oversees every SMF Capital search. View Adrian’s ICAEW profile.
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