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Question 1 of 30
1. Question
MAS conducted a series of AML/CFT banking inspections across Q4 2016 – Q2 2018 that scrutinised the effectiveness of banks’ TM systems in the context of their broader AML/CFT regimes, using three-pillar framework known as the three pillars of effectiveness. Which of the following makes up the three pillars of effectiveness?
I. Execution
II. Education
III. Governance
IV. Risk AwarenessCorrect
The three pillars of effectiveness are governance, risk awareness, and execution. Given the importance of robust TM, the “three pillars of effectiveness” is the framework that MAS used to scrutinise the effectiveness of banks’ TM systems in the context of their broader AML/CFT regimes.
Incorrect
The three pillars of effectiveness are governance, risk awareness, and execution. Given the importance of robust TM, the “three pillars of effectiveness” is the framework that MAS used to scrutinise the effectiveness of banks’ TM systems in the context of their broader AML/CFT regimes.
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Question 2 of 30
2. Question
Financial institutions should monitor and ensure the effective performance of transaction monitoring at each stage of the transaction monitoring process chain. Which of these is part of the transaction monitoring process chain?
I. Robust implementation
II. Knowing the financial institution
III. Risk-based calibration
IV. Resolve and enhanceCorrect
Transaction monitoring (TM) is a key control in financial institutions’ anti-money laundering and countering the financing of terrorism (“AML/CFT”) policies and procedures. The following make up the transaction monitoring process chain:
– Knowing the customer
– Risk-based calibration
– Robust implementation
– Resolve and enhanceIncorrect
Transaction monitoring (TM) is a key control in financial institutions’ anti-money laundering and countering the financing of terrorism (“AML/CFT”) policies and procedures. The following make up the transaction monitoring process chain:
– Knowing the customer
– Risk-based calibration
– Robust implementation
– Resolve and enhance -
Question 3 of 30
3. Question
The risks financial institutions face are dynamic and the transactions they carry out are varied and voluminous. Which of the following should financial institutions with higher inherent risks do in order to adequately mitigate their risks?
Correct
Financial institutions with higher inherent risks or specific transaction monitoring control deficiencies to address should perform more regular reviews in order to adequately mitigate their risks. These reviews should be targeted at sustaining system effectiveness by imbibing the changing risk environment.
Incorrect
Financial institutions with higher inherent risks or specific transaction monitoring control deficiencies to address should perform more regular reviews in order to adequately mitigate their risks. These reviews should be targeted at sustaining system effectiveness by imbibing the changing risk environment.
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Question 4 of 30
4. Question
Which of the following are factors that could compromise outputs or outcomes of transaction monitoring?
I. Appropriate calibration
II. Process inefficiencies
III. Staff issues
IV. System failuresCorrect
Financial institutions’ board and senior management must take an active role in overseeing the satisfactory performance of transaction monitoring. It is incumbent on the board and senior management to adequately resolve matters in a prompt and timely manner when outputs or outcomes are compromised due to factors such as inappropriate calibration, process inefficiencies, staff issues or system failures.
Incorrect
Financial institutions’ board and senior management must take an active role in overseeing the satisfactory performance of transaction monitoring. It is incumbent on the board and senior management to adequately resolve matters in a prompt and timely manner when outputs or outcomes are compromised due to factors such as inappropriate calibration, process inefficiencies, staff issues or system failures.
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Question 5 of 30
5. Question
When onboarding customers, which of the following are financial institutions not required to perform in order to identify and mitigate any prospective money laundering and
terrorism financing (“ML/TF”) risks?I. Risk assessments
II. Promotional advertisements
III. Fraud examination
IV. Due diligence checksCorrect
When onboarding customers, financial institutions are required to perform risk assessments and due diligence checks in order to identify and mitigate any prospective money laundering and terrorism financing (ML/TF) risks, including proliferation financing (PF) risks, at the onset.
Incorrect
When onboarding customers, financial institutions are required to perform risk assessments and due diligence checks in order to identify and mitigate any prospective money laundering and terrorism financing (ML/TF) risks, including proliferation financing (PF) risks, at the onset.
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Question 6 of 30
6. Question
Transaction monitoring is a key control in financial institutions’ anti-money laundering and countering the financing of terrorism (“AML/CFT”) policies and procedures. Which of these is not an advantage of an effective transaction monitoring system?
Correct
An effective transaction monitoring system enables financial institutions to detect and assess whether customers’ transactions pose suspicion when considered against their respective backgrounds and profiles. Transaction monitoring systems also facilitate the holistic reviews of customer transactions over periods of time, in order to monitor for any unusual or suspicious trends, patterns or activities that may take place.
Incorrect
An effective transaction monitoring system enables financial institutions to detect and assess whether customers’ transactions pose suspicion when considered against their respective backgrounds and profiles. Transaction monitoring systems also facilitate the holistic reviews of customer transactions over periods of time, in order to monitor for any unusual or suspicious trends, patterns or activities that may take place.
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Question 7 of 30
7. Question
A transaction monitoring system is composed of various elements. Which of the following are elements that an effective transaction monitoring system would comprise of?
I. Robust risk awareness
II. Meaningful integration
III. Active oversight
IV. A poorly-calibrated frameworkCorrect
An effective transaction monitoring system enables financial institutions to detect and assess whether customers’ transactions pose suspicion when considered against their respective backgrounds and profiles. An effective transaction monitoring system is comprised of the following elements:
– A well-calibrated framework
– Robust risk awareness
– Meaningful integration
– Active oversightIncorrect
An effective transaction monitoring system enables financial institutions to detect and assess whether customers’ transactions pose suspicion when considered against their respective backgrounds and profiles. An effective transaction monitoring system is comprised of the following elements:
– A well-calibrated framework
– Robust risk awareness
– Meaningful integration
– Active oversight -
Question 8 of 30
8. Question
Financial institutions should regularly review and enhance transaction monitoring frameworks, and also do so when trigger events occur. Which of these are characteristic of staff who should execute proper functioning and effectiveness of a financial institution’s transaction monitoring systems?
I. Well-trained
II. Exercise sound judgment
III. Poor attention to details
IV. CompetentCorrect
To ensure proper functioning and effectiveness of their transaction monitoring systems, financial institutions must ensure that transaction monitoring and reviews are executed by competent and well-trained staff who exercise sound judgment in targeting unusual transactions, activities, and behaviours.
Incorrect
To ensure proper functioning and effectiveness of their transaction monitoring systems, financial institutions must ensure that transaction monitoring and reviews are executed by competent and well-trained staff who exercise sound judgment in targeting unusual transactions, activities, and behaviours.
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Question 9 of 30
9. Question
After establishing a business relationship, financial institutions are required to maintain a current and accurate knowledge of their customers. Which of the following ways can financial institutions use to achieve this?
I. Performance of periodic reviews.
II. Performance of reviews based on trigger events.
III. Enhance the frequency and intensity of customer engagement.
IV. Send out regular warning notices to customers.Correct
Financial institutions are required to maintain current and accurate knowledge of their customers, after establishing a business relationship, through the performance of periodic reviews and/or reviews based on trigger events, and where appropriate enhance the frequency and intensity of customer engagement where the risks are assessed to be greater.
Incorrect
Financial institutions are required to maintain current and accurate knowledge of their customers, after establishing a business relationship, through the performance of periodic reviews and/or reviews based on trigger events, and where appropriate enhance the frequency and intensity of customer engagement where the risks are assessed to be greater.
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Question 10 of 30
10. Question
Financial institutions are presently required to ensure that their transaction monitoring systems are configured in view of their specific risks, contexts, and needs. What type of transaction monitoring systems are financial institutions with a large scale of operations expected to have in place?
Correct
Financial institutions with a larger scale of operations are expected to have in place automated systems capable of handling the risks from an increased volume and variance of transactions. While smaller Financial institutions may rely on transaction monitoring systems that are less automated, they must still ensure that these are appropriately executed to satisfactorily address the risks from their day-to-day transaction activities.
Incorrect
Financial institutions with a larger scale of operations are expected to have in place automated systems capable of handling the risks from an increased volume and variance of transactions. While smaller Financial institutions may rely on transaction monitoring systems that are less automated, they must still ensure that these are appropriately executed to satisfactorily address the risks from their day-to-day transaction activities.
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Question 11 of 30
11. Question
Most banks perform risk-based customer segmentation in order to calibrate suitable parameters and thresholds for each segment. Which of these are the most commonly used statistical tools and methods employed by banks to achieve this?
I. Above-the-line (ATL) testing
II. Below-the-line (BTL) testing
III. Beside-the-line (BTL) testing
IV. Beneath-the-line (BTL) testingCorrect
When appropriately configured and implemented, transaction monitoring parameters and thresholds enable financial institutions to flag unusual transactions with a reasonable degree of certainty of potential ML/TF characteristics warranting further inquiry. Some banks have employed the use of certain statistical tools and methods such as above-the-line (ATL) and below-the-line (BTL) testing to better fine-tune their calibrations.
Incorrect
When appropriately configured and implemented, transaction monitoring parameters and thresholds enable financial institutions to flag unusual transactions with a reasonable degree of certainty of potential ML/TF characteristics warranting further inquiry. Some banks have employed the use of certain statistical tools and methods such as above-the-line (ATL) and below-the-line (BTL) testing to better fine-tune their calibrations.
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Question 12 of 30
12. Question
Banks have grouped TM parameters and thresholds into risk scenarios to enable them to more precisely target transaction patterns and behaviours consistent with known ML/TF typologies. Which of the following, are risk areas that banks have developed scenarios to detect?
Correct
Some risk areas that banks have developed scenarios to detect include:
– Large or complex transactions with no visible/apparent economic or lawful purpose.
– Aggregated frequent and small transactions.
– Unusual patterns of physical cash deposits or withdrawals, which are large when aggregated over a period of time.
– Significant deviations from past account activity (or inactivity).
– Transaction activities with nexus to higher risk countries or geographies.
– Detection of activities or behaviours consistent with certain predicate offences (e.g. possible tax evasion or avoidance, corruption nexus, or terrorism financing).
– Hidden relationships between customers or accounts evident through funds flows.Incorrect
Some risk areas that banks have developed scenarios to detect include:
– Large or complex transactions with no visible/apparent economic or lawful purpose.
– Aggregated frequent and small transactions.
– Unusual patterns of physical cash deposits or withdrawals, which are large when aggregated over a period of time.
– Significant deviations from past account activity (or inactivity).
– Transaction activities with nexus to higher risk countries or geographies.
– Detection of activities or behaviours consistent with certain predicate offences (e.g. possible tax evasion or avoidance, corruption nexus, or terrorism financing).
– Hidden relationships between customers or accounts evident through funds flows. -
Question 13 of 30
13. Question
Which of the following checks would financial institutions require their front office staff to conduct before executing transactions assessed to pose higher risks or involving higher risk customers?
I. Inquire on the background and purpose of transactions that exceed predefined thresholds.
II. Engage customers, file call reports on the transaction date that detail relevant risk considerations.
III. Process the transactions in order to keep the customer happy.
IV. Obtain approvals from line managers and/or compliance personnel before executing higher risk transactions.Correct
Some financial institutions require their front office staff to conduct pre-transaction checks before executing transactions assessed to pose higher risks or involving higher risk customers. These checks include the following:
– Inquiring on the background and purpose of transactions that exceed predefined thresholds, to ensure alignment with customers’ profiles and purpose of accounts.
– Engaging customers, filing call reports on the transaction date that detail relevant risk considerations (e.g. nature of the relationship between customer and beneficiary, identifying the origin and destination of funds), and attaching supporting documents supplied by the customer.
– Obtaining approvals from line managers and/or compliance personnel before executing higher risk transactions.Incorrect
Some financial institutions require their front office staff to conduct pre-transaction checks before executing transactions assessed to pose higher risks or involving higher risk customers. These checks include the following:
– Inquiring on the background and purpose of transactions that exceed predefined thresholds, to ensure alignment with customers’ profiles and purpose of accounts.
– Engaging customers, filing call reports on the transaction date that detail relevant risk considerations (e.g. nature of the relationship between customer and beneficiary, identifying the origin and destination of funds), and attaching supporting documents supplied by the customer.
– Obtaining approvals from line managers and/or compliance personnel before executing higher risk transactions. -
Question 14 of 30
14. Question
As part of the periodic account review process, which of the following do financial institutions typically require their front office to do?
I. Update customers’ KYC information.
II. Update beneficial owners’ KYC information.
III. Implement changes to the company’s financial condition.
IV. Update changes to the customers’ personal information.Correct
Financial institutions are expected to keep KYC information up-to-date on an ongoing basis. As part of the periodic account review process, financial institutions typically require their front office to update customers’ or beneficial owners’ KYC information and seek to update changes to the customers’ and beneficial owners’ personal information and financial condition.
Incorrect
Financial institutions are expected to keep KYC information up-to-date on an ongoing basis. As part of the periodic account review process, financial institutions typically require their front office to update customers’ or beneficial owners’ KYC information and seek to update changes to the customers’ and beneficial owners’ personal information and financial condition.
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Question 15 of 30
15. Question
An effective TM (Transaction monitoring) system enables FIs (financial institutions) to detect and assess whether customers’ transactions pose suspicion when considered against their respective backgrounds and profiles.
Which of the following elements is an effective TM system comprised of?
I. Robust risk awareness.
II. Meaningful integration.
III. A well-calibrated framework.
IV. Overlooking important details.Correct
An effective TM system is comprised of robust risk awareness, meaningful integration, a well-calibrated framework, and active oversight.
Incorrect
An effective TM system is comprised of robust risk awareness, meaningful integration, a well-calibrated framework, and active oversight.
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Question 16 of 30
16. Question
Transaction monitoring (“TM”) is a key control in financial institutions’ (“FIs”) anti-money laundering and countering the financing of terrorism (“AML/CFT”) policies and procedures. At which stage of the transaction monitoring process chain should financial institutions monitor and ensure the effective performance of transaction monitoring?
Correct
Financial institutions should monitor and ensure the effective performance of transaction monitoring at each stage of the transaction monitoring process chain. Listed below are the stages of the process chain:
– Knowing the customer stage.
– Risk-Based calibration stage.
– Robust implementation stage.
– The “resolve and enhance” stage.Incorrect
Financial institutions should monitor and ensure the effective performance of transaction monitoring at each stage of the transaction monitoring process chain. Listed below are the stages of the process chain:
– Knowing the customer stage.
– Risk-Based calibration stage.
– Robust implementation stage.
– The “resolve and enhance” stage. -
Question 17 of 30
17. Question
Banks group TM parameters and thresholds into risk scenarios to enable them to more precisely target transaction patterns and behaviours consistent with known ML/TF typologies such as smurfing, pass-through payments, or circular flows involving opaque structures. Which of the following are allowed the use of scenarios?
Correct
The use of scenarios is not limited to banks or FIs with automated systems, as smaller FIs with less-automated systems should apply the same logic in training and guiding their staff to detect these more complex risks.
Incorrect
The use of scenarios is not limited to banks or FIs with automated systems, as smaller FIs with less-automated systems should apply the same logic in training and guiding their staff to detect these more complex risks.
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Question 18 of 30
18. Question
Which of the following are examples of pre-transaction checks conducted by FIs front office staff before executing transactions to assess transactions that may pose higher risks or involve higher risk customers?
I. Inquiring on the background and purpose of transactions that exceed predefined thresholds.
II. Engaging customers, filing call reports on the transaction date and attaching supporting documents supplied by the customer.
III. Obtaining approvals from line managers and/or compliance personnel before executing higher risk transactions.
IV. Requesting that customers pay a non-refundable application fee for every transaction.Correct
Some pre-transaction checks conducted by FIs front office staff before executing transactions to assess transactions that may pose higher risks or involve higher risk customers include but are not limited to inquiring on the background and purpose of transactions that exceed predefined thresholds, engaging customers, filing call reports on the transaction date and attaching supporting documents supplied by the customer and obtaining approvals from line managers and/or compliance personnel before executing higher risk transactions.
Incorrect
Some pre-transaction checks conducted by FIs front office staff before executing transactions to assess transactions that may pose higher risks or involve higher risk customers include but are not limited to inquiring on the background and purpose of transactions that exceed predefined thresholds, engaging customers, filing call reports on the transaction date and attaching supporting documents supplied by the customer and obtaining approvals from line managers and/or compliance personnel before executing higher risk transactions.
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Question 19 of 30
19. Question
FIs must instil risk consciousness and embed good practices amongst staff, to facilitate vigilance in identifying TM red flags and to escalate and handle these appropriately. Which of the following should FIs ensure that their lists of ML/TF/PF red flags comply with?
Correct
FIs should ensure that their lists of ML/TF/PF red flags are continually updated, not just to include new red flags but also to provide further guidance on existing ones, particularly when staff give feedback on a lack of clarity in interpreting these red flags.
Incorrect
FIs should ensure that their lists of ML/TF/PF red flags are continually updated, not just to include new red flags but also to provide further guidance on existing ones, particularly when staff give feedback on a lack of clarity in interpreting these red flags.
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Question 20 of 30
20. Question
Financial institutions should ensure good governance and strong oversight of their material outsourcing arrangements. What does this mean to financial institutions?
Correct
FIs should ensure good governance and strong oversight of their material outsourcing arrangements. This means that FIs’ board and senior management are expected to be fully apprised of any risks arising from their material outsourcing arrangements, and must ensure that these arrangements do not result in the compromise or weakening of their organisations’ ML/TF risk management, internal controls and conduct of business.
Incorrect
FIs should ensure good governance and strong oversight of their material outsourcing arrangements. This means that FIs’ board and senior management are expected to be fully apprised of any risks arising from their material outsourcing arrangements, and must ensure that these arrangements do not result in the compromise or weakening of their organisations’ ML/TF risk management, internal controls and conduct of business.
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Question 21 of 30
21. Question
Financial institutions generally perform independent verification measures on the source of wealth to serve as a plausibility check on the information provided to them.
Which of the following is/are the examples of independent corroboration measures?
I. Citing public information sources.
II. Using only their own data.
III. Obtaining documentary evidence.
IV. Not Requesting essential details from external sources.Correct
Financial institutions generally perform independent verification measures on the source of wealth to serve as a plausibility check on the information provided to them. Examples of independent corroboration measures include citing public information sources (e.g. company websites, corporate registration websites, journals and media reports) to verify net worth of customers/financial statistics of operating companies as well as obtaining documentary evidence, such as bank statements, confirmation from third party professionals (e.g. tax advisors), and financial statements or management accounts of operating companies. Financial institutions also assess the authenticity and reliability of the documents provided by the customers.
Incorrect
Financial institutions generally perform independent verification measures on the source of wealth to serve as a plausibility check on the information provided to them. Examples of independent corroboration measures include citing public information sources (e.g. company websites, corporate registration websites, journals and media reports) to verify net worth of customers/financial statistics of operating companies as well as obtaining documentary evidence, such as bank statements, confirmation from third party professionals (e.g. tax advisors), and financial statements or management accounts of operating companies. Financial institutions also assess the authenticity and reliability of the documents provided by the customers.
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Question 22 of 30
22. Question
Financial institutions seek to understand the intended nature and purpose of the business relationship and expected account activity to ensure that the level and type of transactions undertaken are consistent with their knowledge of the customers and the purpose of the accounts. What are the requirements for accounts used for commercial transactions?
Correct
The information gathered should be sufficiently detailed to facilitate independent ongoing transaction monitoring. Financial institutions should ensure that accounts are subjected to enhanced monitoring where those accounts are used for commercial transactions.
Incorrect
The information gathered should be sufficiently detailed to facilitate independent ongoing transaction monitoring. Financial institutions should ensure that accounts are subjected to enhanced monitoring where those accounts are used for commercial transactions.
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Question 23 of 30
23. Question
Wire transfers carry significant ML/TF risk as such payment gateways could be misused to move illegitimate funds across national borders. What are financial institutions expected to do about wire transfers?
Correct
Financial institutions should always have full knowledge of originator details for incoming wire transfers, and ensure that similar information is provided for all outgoing wire transfers eg your bank account number, the recipient’s name, the recipient’s bank name and address.
Incorrect
Financial institutions should always have full knowledge of originator details for incoming wire transfers, and ensure that similar information is provided for all outgoing wire transfers eg your bank account number, the recipient’s name, the recipient’s bank name and address.
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Question 24 of 30
24. Question
In most cases of external fraud, the fraudsters attach forged copies of signed letters of authorisation to the email instructions. What are financial institutions expected not to do?
Correct
External fraud is another risk that financial institutions have to confront and manage. There have been cases where financial institutions received fraudulent email instructions to release funds from their customers’ accounts to third-party accounts at other financial institutions. Hence, financial institutions should pay special attention to, and put in place rigorous controls over third party account transfers and activities, particularly if they involve inactive/dormant and/or hold-mail accounts. Financial institutions should not carry out any transaction without proper verification.
Incorrect
External fraud is another risk that financial institutions have to confront and manage. There have been cases where financial institutions received fraudulent email instructions to release funds from their customers’ accounts to third-party accounts at other financial institutions. Hence, financial institutions should pay special attention to, and put in place rigorous controls over third party account transfers and activities, particularly if they involve inactive/dormant and/or hold-mail accounts. Financial institutions should not carry out any transaction without proper verification.
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Question 25 of 30
25. Question
Hold Mail stops mail delivery to your address, but does not redirect it. Which of these is/are the reason(s) why accounts with HM (hold-mail) services are more susceptible to being abused?
Correct
Accounts with HM services are more susceptible to being abused since customers’ receipt of account statements on a delayed basis creates opportunities for misappropriation of assets and other irregularities to go undetected.
Incorrect
Accounts with HM services are more susceptible to being abused since customers’ receipt of account statements on a delayed basis creates opportunities for misappropriation of assets and other irregularities to go undetected.
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Question 26 of 30
26. Question
Inactive/dormant accounts are exposed to increased risk of misappropriation. Such accounts typically receive minimal or no notice from their holders. Unauthorized withdrawals from such accounts could thus escape detection if proper controls are not in place. Financial institutions have frameworks in place to govern the operations of inactive/dormant accounts. Which of the following are included?
I. Defining when an account is classified as inactive/dormant.
II. Conditions under which such an account may be reactivated.
III. The approval authority for its reactivation.
IV. Inactive/dormant accounts are not subjected to regular independent review and should not be blocked to prevent unauthorized transactions.Correct
Financial institutions have frameworks in place to govern the operations of inactive/dormant accounts. They typically include defining when an account is classified as inactive/dormant, conditions under which such an account may be reactivated, and the approval authority for its reactivation. Inactive/dormant accounts are subjected to regular independent review and are blocked to prevent unauthorized transactions.
Incorrect
Financial institutions have frameworks in place to govern the operations of inactive/dormant accounts. They typically include defining when an account is classified as inactive/dormant, conditions under which such an account may be reactivated, and the approval authority for its reactivation. Inactive/dormant accounts are subjected to regular independent review and are blocked to prevent unauthorized transactions.
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Question 27 of 30
27. Question
Financial institutions generally have processes in place to understand their customers’ investment goals, risk tolerance and personal circumstances. These typically involve customers completing a risk assessment questionnaire. Which of the following is not a reason for the questionnaire?
Correct
Financial institutions generally have processes in place to understand their customers’ investment goals, risk tolerance, and personal circumstances. These typically involve customers completing a risk assessment questionnaire, which allows the financial institutions to understand and assess the customers’ investment objectives, investment time horizon, loss tolerance, volatility tolerance, financial needs or constraints, and prior investment knowledge and experience.
Incorrect
Financial institutions generally have processes in place to understand their customers’ investment goals, risk tolerance, and personal circumstances. These typically involve customers completing a risk assessment questionnaire, which allows the financial institutions to understand and assess the customers’ investment objectives, investment time horizon, loss tolerance, volatility tolerance, financial needs or constraints, and prior investment knowledge and experience.
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Question 28 of 30
28. Question
Which of the following are not included in the requirements for hold mail services?
I. Requests for HM services should not be routinely approved without assessing the reasonableness of the requests.
II. Financial institutions should always send retained mails to a random recipient.
III. Financial institutions should not have retained mail left uncollected for an extended period of time.
IV. Financial institutions should ensure that retained mail is not delivered to third parties without written instructions from customers to confirm that these individuals are duly authorised to collect the retained mail on their behalf.Correct
Requests for HM services should not be routinely approved without assessing the reasonableness of the requests. Financial institutions should ensure that retained mail is not delivered to third parties without written instructions from customers to confirm that these individuals are duly authorised to collect the retained mail on their behalf. Financial institutions should not have retained mail left uncollected for an extended period of time. Institutions should have a process to track and manage accounts with uncollected retained mail.
Incorrect
Requests for HM services should not be routinely approved without assessing the reasonableness of the requests. Financial institutions should ensure that retained mail is not delivered to third parties without written instructions from customers to confirm that these individuals are duly authorised to collect the retained mail on their behalf. Financial institutions should not have retained mail left uncollected for an extended period of time. Institutions should have a process to track and manage accounts with uncollected retained mail.
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Question 29 of 30
29. Question
FIs are expected to implement effective reporting systems to ensure that their board and senior management are updated on key ML/TF risks frequently. In which of the following significant risk matters based on MAS’ inspections is there no scope for FIs to enhance their reporting and escalation?
Correct
Based on MAS’ inspections, there is scope for FIs to enhance their reporting and escalation of the following significant risk matters:
– System implementation delays.
– IT incidents or system limitations impacting the organisation’s TM capabilities.
– Results and remediation of compliance or QA reviews.
– Regular updates and follow-ups with regard to alert ageing statistics.Incorrect
Based on MAS’ inspections, there is scope for FIs to enhance their reporting and escalation of the following significant risk matters:
– System implementation delays.
– IT incidents or system limitations impacting the organisation’s TM capabilities.
– Results and remediation of compliance or QA reviews.
– Regular updates and follow-ups with regard to alert ageing statistics. -
Question 30 of 30
30. Question
Appropriate policies, procedures and controls should be put in place to prevent fraud in vulnerable areas, such as third-party account transfers, hold-mail and inactive/dormant accounts. What are the necessary steps taken when dealing with customers?
Correct
When dealing with customers, institutions should act responsibly and ensure that customers fully understand the risks of products marketed and that the suitability of the products commensurate with customers’ risk appetite and investment needs.
Incorrect
When dealing with customers, institutions should act responsibly and ensure that customers fully understand the risks of products marketed and that the suitability of the products commensurate with customers’ risk appetite and investment needs.