CMFAS RES5 AML / CFT question: unable to complete

CMFAS RES5AML / CFT

Where a financial adviser is unable to complete the required CDD measures on a customer, the Notice requires it to:

A Proceed on a provisional basis, and complete the outstanding CDD within 12 months of onboarding the customer
B Not commence or continue relations or undertake the transaction, and consider whether an STR is warranted
C Complete the sale, record that verification is outstanding and follow up with the customer monthly
D Refer the customer to another financial adviser, keeping no record of the incomplete application

Show the answer and explanation

Answer: B. Not commence or continue relations or undertake the transaction, and consider whether an STR is warranted

If CDD cannot be completed, the FA must not commence or continue business relations or undertake the transaction, and it must consider whether the circumstances warrant an STR. It cannot proceed provisionally, skip verification, or quietly offload the customer.

Common mistake

Incomplete CDD means stop and assess for an STR — not proceed provisionally or hand the client on.

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A financial adviser forms a suspicion of money laundering and reasonably believes that continuing a CDD step would tip off the customer. Under the Notice it may Where the customer is a trust, the beneficial owners the financial adviser must identify include A financial adviser completed a customer's last transaction on 1 April 2021 and terminated the business relationship on 1 April 2023. Ignoring any specific request or order from STRO, the record of that transaction may be destroyed no earlier than

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Original study material mapped to the public CMFAS RES5 syllabus. Unofficial, not endorsed by MAS or SCI. Verify figures and rules against current guidance before relying on them.