Humber/Ontario Real Estate Course 3 Exam Practice

How often must brokerages prepare a risk assessment as per FINTRAC requirements?

1. Every month

2. Every three months

3. Every six months

4. Annually

5. Biannually

6. Quarterly

The correct answer is: Every six months

Brokerages are required to prepare a risk assessment at least once every two years. This requirement is based on the need for brokerages to assess the risks associated with their activities and clients regarding money laundering and terrorist financing, as stipulated by FINTRAC (Financial Transactions and Reports Analysis Centre of Canada). Conducting this assessment helps brokerages stay compliant and effectively manage potential risks. While the answer chosen suggests that a risk assessment is conducted every six months, it's important to clarify that the minimum timeframe is actually more flexible, allowing up to two years between assessments unless there are significant changes in the business or environment that would necessitate more frequent reviews. This enables brokerages to allocate their resources efficiently while still monitoring risks effectively. Choices indicating more frequent assessments, such as monthly or quarterly, would place an undue burden on brokerages without providing significant additional benefits, as risk profiles generally do not change at such a rapid pace. Therefore, the correct understanding is that brokerages should perform a comprehensive risk assessment at least every two years to ensure they comply with regulatory requirements.