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The KEO may be the compliance officer

A worked RES examination question on aml cft, from our Paper 2 bank — with the rule it turns on, and why each of the four options is right or wrong.

Paper 2Lesson 1AML CFTFree — no sign-up

The question

Mr Quek is both Greenview's KEO and its Compliance Officer. Which statement correctly describes the agency's AML internal controls?

  1. A. As a 26-salesperson agency, Greenview is too small to need documented internal controls.
  2. B. The KEO cannot also be the compliance officer; the two roles must be held by different people.
  3. C. Records of its AML controls need be kept for a minimum of only two years, not five.
  4. D. Greenview must keep documented controls, a compliance officer, and five-year records.

The answer, and why

Answer: D

The rule. Every estate agent must keep documented internal AML controls, appoint a compliance officer, and retain records for at least five years. The KEO may be the compliance officer — indeed for a sole proprietor the KEO must be.

Why D is correct. Greenview must maintain documented controls, a compliance officer, and five-year record retention.

The other options.

  • A exempts a "small" agency; size does not remove the controls obligation.
  • B says the KEO cannot be the compliance officer; the roles may be held by one person.
  • C understates retention at two years; the minimum is five.

Exam note. Documented controls, a compliance officer, five-year records — for every agency, whatever its size.

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