Humber/Ontario Real Estate Course 4 Exam Practice

Which statement is correct regarding FINTRAC compliance for real estate brokerages?

1. Brokerages with fewer than 10 employees do not require a compliance officer to oversee FINTRAC requirements.

2. An identification record must be kept for every real estate transaction in which a brokerage is involved, subject to certain exceptions.

3. Identification verification must be completed for clients, but is not relevant to customers as they are not being represented in the transaction.

4. Identification verification is not required when the seller is a corporation.

5. Brokerages need not comply with FINTRAC if the transaction is below $10,000.

6. FINTRAC compliance only applies to commercial real estate transactions.

The correct answer is: An identification record must be kept for every real estate transaction in which a brokerage is involved, subject to certain exceptions.

The statement regarding FINTRAC compliance for real estate brokerages that accurately reflects the requirements is that an identification record must be kept for every real estate transaction in which a brokerage is involved, subject to certain exceptions. This aligns with the regulations set by FINTRAC (Financial Transactions and Reports Analysis Centre of Canada), which mandates that real estate brokerages identify their clients and keep a record of the identification. The requirement to maintain an identification record is a key aspect of FINTRAC compliance, designed to prevent money laundering and the financing of terrorist activities within real estate transactions. Brokerages are obligated to collect and record identifying information about clients when engaging in transactions, ensuring that all necessary due diligence is performed. While there may be exceptions in specific situations, the general rule is that every transaction requires this identification record. Other options imply either an exemption from these requirements or misunderstandings about the identification processes that are not reflected in FINTRAC regulations. For instance, some statements incorrectly address the relevance of identification verification concerning clients and customers, the application of these rules based on the number of employees, or thresholds for compliance that don’t reflect current requirements. Thus, the accurate understanding of FINTRAC compliance emphasizes the importance of keeping identification records for all transactions to uphold the integrity