CISI Regulatory Practice Exam 2026 - Free Regulatory Practice Questions and Study Guide

The first stage of money laundering is placement. This initial phase involves introducing illicit funds into the financial system, with the intent to conceal the origins of the money. During placement, criminals may deposit cash into banks, purchase financial instruments, or fund businesses that generate legitimate-looking revenues. The purpose is to distance the money from its illegal origins, making it harder for authorities to trace.

Understanding placement is crucial, as it sets the foundation for the subsequent stages of money laundering, which include layering—where the money is moved around to further obscure its original source—and integration, where it is reintegrated into the economy as apparently legitimate funds. Each stage builds upon the last, but placement is the necessary first step in the laundering process.