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RES exam question on AML / CFT: feature is NOT a red flag

MediumAnti-Money Laundering (PMLPFTF) · Paper 2

Salesperson Benedict reviews four buyer files at his agency in September 2026, each for a private residential unit priced between $1.5 million and $2 million. His manager asks him to pick out the one feature that is not a recognised money-laundering red flag. Which feature is NOT a red flag?

  1. ASoon after paying the option fee, the buyer cancels and asks for a refund to an unrelated person
  2. BThe buyer pays with his CPF savings and a bank loan approved in his own name
  3. CThe buyer uses a newly formed company and will not say who owns or controls it
  4. DThe buyer resells a unit bought four months earlier at a loss, and gives no reason for it
Show answer & explanation

Answer

B. The buyer pays with his CPF savings and a bank loan approved in his own name

Explanation

Answer: Paying with CPF savings and a bank loan in his own name is not a red flag. Both are traceable, regulated sources that suggest no disguised funds.Rule: CEA's suspicious indicators include funds moving to or from unrelated third parties, reluctance to reveal the beneficial owner behind an entity, and transactions with no apparent economic sense. A red flag calls for closer checks and, if suspicion remains, a Suspicious Transaction Report.Source: CEA, Guide on the PMLPFTF Regulations (revised 30 June 2025)

Why the other options are wrong

  • Refund of the option fee to an unrelated person: A refund routed to an unrelated person moves money to a third party, a listed indicator.
  • New company whose owner stays undisclosed: An entity with an undisclosed owner hides the beneficial owner.
  • Quick resale at an unexplained loss: A quick, unexplained loss makes no commercial sense.

Study the concept behind this question: AML/CFT for Property Agents: CDD, Source of Funds & STR

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Original study material mapped to the public CEA RES syllabus. Verify any rate-based figures against current IRAS/CPF/MAS rules before relying on them.