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Bahrain RERA Broker Exam study materials
Bahrain RERA Broker Exam study resources

Bahrain RERA Broker Exam practice questions

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Question 1Real Estate Broker Licensing (issuance, renewal, cancellation)

Under Bahrain's real estate broker licensing framework, which authority is responsible for issuing broker licences and regulating brokerage activity?

  1. The Ministry of Industry and Commerce
  2. The Real Estate Regulatory Authority (RERA) Correct answer.
  3. The Central Bank of Bahrain
  4. The Bahrain Chamber of Commerce and Industry

Explanation

RERA is the dedicated regulator established to license and supervise real estate brokers and other market participants in Bahrain. It sets the licensing conditions, code of conduct, and disciplinary powers for brokerage firms and individual brokers. Other bodies may register companies or regulate finance, but they do not issue broker licences.

Question 2Real Estate Broker Licensing (issuance, renewal, cancellation)

A newly formed brokerage company wants to begin arranging property sales in Bahrain. What is the primary authorisation it must obtain before conducting brokerage business?

  1. A banking services licence
  2. A real estate broker licence from RERA Correct answer.
  3. A construction contractor classification
  4. A tourism operator permit

Explanation

Anyone conducting real estate brokerage activity in Bahrain must hold a valid broker licence issued by RERA. The licence is the legal basis for advertising, marketing, and negotiating property transactions. Permits for tourism, banking, or contracting cover unrelated activities and cannot substitute for it.

Question 3Real Estate Broker Licensing (issuance, renewal, cancellation)

How is a RERA broker licence normally kept in force after its initial term expires?

  1. By paying a fine after expiry
  2. By transferring it to a new owner
  3. By applying for renewal before expiry Correct answer.
  4. By automatic rollover with no action

Explanation

Broker licences are time-limited and must be renewed through an application to RERA before the licence lapses. Renewal lets the regulator confirm that the broker still meets the required conditions, such as premises, qualifications, and good standing. Automatic rollover, post-expiry fines, and transfer to another person are not renewal mechanisms.

Question 4Real Estate Broker Licensing (issuance, renewal, cancellation)

A broker's licence is cancelled by RERA. What is the most direct consequence for the broker's continued brokerage activity?

  1. The broker may work until the annual fee is refunded
  2. The broker may keep working under a partner's licence
  3. The broker must stop conducting brokerage activity Correct answer.
  4. The broker may continue for a grace period of one year

Explanation

Cancellation removes the legal authorisation to act as a broker, so the holder must cease brokerage activity. Working under another person's licence would itself be unauthorised practice. There is no automatic grace period and no rule allowing continued work pending a fee refund.

Question 5Real Estate Broker Licensing (issuance, renewal, cancellation)

Which of the following is typically a core eligibility condition for an individual applying for a broker licence in Bahrain?

  1. Good repute and no relevant criminal conviction Correct answer.
  2. Membership in a trade union
  3. A minimum of ten years of prior sales experience
  4. Ownership of at least one property

Explanation

Licensing regimes require applicants to be fit and proper, which includes good repute and the absence of relevant convictions such as fraud or dishonesty offences. Property ownership and union membership are unrelated to fitness. A ten-year experience minimum is far beyond typical entry requirements.

Question 6Real Estate Broker Licensing (issuance, renewal, cancellation)

A brokerage firm changes its registered trade name. What should the firm do regarding its RERA licence?

  1. Wait until the next renewal cycle to mention it
  2. Notify RERA and apply to amend the licence details Correct answer.
  3. Surrender the licence and stop trading
  4. Nothing, because the licence follows the trade name automatically

Explanation

Licence particulars must reflect the broker's actual identity and details, so material changes such as a trade name must be reported and the licence amended. Failing to update records can create compliance breaches and confusion for clients. Surrender is unnecessary, and deferring disclosure until renewal leaves the licence inaccurate.

Question 7Real Estate Broker Licensing (issuance, renewal, cancellation)

A broker's licence lapses because the renewal application was filed after the expiry date. Which statement best describes the position?

  1. The broker may rely on the previous year's licence
  2. The late application is automatically approved
  3. The broker must not conduct brokerage until the licence is restored Correct answer.
  4. The broker may trade freely while the late application is processed

Explanation

Once a licence expires, the holder loses authorisation and cannot lawfully conduct brokerage activity until RERA restores or renews it. A pending application does not itself confer a right to trade. Late applications are assessed on their merits and are not automatically approved.

Question 8Real Estate Broker Licensing (issuance, renewal, cancellation)

Which situation most clearly gives RERA grounds to cancel or suspend a broker licence?

  1. The broker submits falsified documents in a licence application Correct answer.
  2. The broker hires an additional administrative assistant
  3. The broker advertises a listing on a property portal
  4. The broker attends a professional training course

Explanation

Submitting false or falsified documents undermines the integrity of the licensing process and is a serious disciplinary matter that can lead to suspension or cancellation. Routine marketing, training, and staffing decisions are ordinary business activities. Only conduct that breaches licensing rules or professional obligations triggers such sanctions.

Question 9Real Estate Broker Licensing (issuance, renewal, cancellation)

A licensed broker wishes to open a second branch office in another governorate. What is the correct approach?

  1. Apply to RERA to license or approve the additional premises Correct answer.
  2. Operate the branch under an employee's personal name
  3. Open the branch and inform RERA only at renewal
  4. Avoid licensing by calling the branch a marketing desk

Explanation

Each business premises from which brokerage is conducted must be covered by the licence, so opening a branch requires RERA approval or a licence amendment. Informing the regulator only at renewal leaves the branch unlicensed in the interim. Relabelling the office does not avoid the licensing requirement.

Question 10Real Estate Broker Licensing (issuance, renewal, cancellation)

What is the main purpose of requiring brokers to display or hold a valid licence number when advertising properties?

  1. To replace the need for a written agreement
  2. To restrict advertising to print media
  3. To let the public and regulator verify authorised brokers Correct answer.
  4. To increase advertising costs

Explanation

Licence identification in advertising allows clients and the regulator to confirm that the advertiser is authorised to conduct brokerage. It supports transparency and helps curb unlicensed practice. It is not a cost measure, is not media-specific, and does not substitute for client agreements.

Question 11Real Estate Broker Licensing (issuance, renewal, cancellation)

An individual broker leaves one licensed firm and joins another. What is the correct licensing position?

  1. The broker's licence automatically follows to the new firm
  2. The new firm may use the old firm's licence
  3. The broker must have the licence updated to reflect the new firm Correct answer.
  4. The broker must surrender the licence permanently

Explanation

A broker licence is linked to the firm through which the individual practises, so a change of firm requires the licence record to be updated or reissued. The licence does not silently transfer, and the new firm cannot operate under another firm's licence. Permanent surrender would end the broker's ability to practise.

Question 12Real Estate Broker Licensing (issuance, renewal, cancellation)

Which document is most likely to be required as part of a broker licence application to confirm the applicant's legal identity?

  1. A vehicle registration certificate
  2. A valid passport or national identity card Correct answer.
  3. A utility bill in a neighbour's name
  4. A property title deed

Explanation

Identity verification is a standard licensing control, and official identity documents such as a passport or national ID establish who the applicant is. Title deeds, vehicle registrations, and third-party utility bills do not prove the applicant's identity. Regulators rely on reliable identity evidence before granting a licence.

Question 13Real Estate Broker Licensing (issuance, renewal, cancellation)

A broker's licence is suspended rather than cancelled. What does suspension mean in practice?

  1. The broker may continue working with written client consent
  2. The broker's licence is permanently extinguished
  3. The broker's authorisation is temporarily withdrawn Correct answer.
  4. The broker may transfer the licence to a colleague

Explanation

Suspension is a temporary withdrawal of authorisation, typically for a defined period or until conditions are met, after which the broker may resume if the regulator permits. Cancellation, by contrast, ends the licence. Suspension does not permit continued practice by consent and does not allow transfer.

Question 14Real Estate Broker Licensing (issuance, renewal, cancellation)

Which fee-related practice is consistent with maintaining a valid broker licence?

  1. Deducting licence fees from client deposits
  2. Deferring all fees until the licence is cancelled
  3. Paying the prescribed licence and renewal fees by the due date Correct answer.
  4. Paying fees only when a client complains

Explanation

Licences carry prescribed fees that must be paid on time to keep the licence valid and the renewal process on track. Using client deposits to pay regulatory fees would improperly mix client money with business expenses. Deferring fees until cancellation is not a recognised practice.

Question 15Real Estate Broker Licensing (issuance, renewal, cancellation)

RERA introduces a new continuing professional development requirement for licence renewal. How should a broker respond?

  1. Rely on experience alone as a substitute
  2. Ignore it until a renewal is refused
  3. Complete the required training before renewal Correct answer.
  4. Ask clients to confirm the broker is competent instead

Explanation

Where renewal is conditioned on continuing professional development, the broker must satisfy the requirement before applying to renew. Ignoring it risks refusal or lapse of the licence. Client references and past experience do not substitute for a formal regulatory requirement.

Question 16Real Estate Broker Licensing (issuance, renewal, cancellation)

A person has been convicted of fraud and now applies for a broker licence. How is this most likely to be treated?

  1. It is a material fitness and propriety concern Correct answer.
  2. It automatically grants an exemption from training
  3. It is irrelevant because the conviction is in the past
  4. It only matters for company licences, not individuals

Explanation

Dishonesty offences bear directly on fitness and propriety, which is central to broker licensing because brokers handle client money and trust. The regulator will assess the conviction as a material concern rather than ignore it. It neither creates exemptions nor applies only to companies.

Question 17Real Estate Broker Licensing (issuance, renewal, cancellation)

Which of the following best describes the status of an unlicensed person who negotiates property sales for a commission in Bahrain?

  1. Lawful if the commission is below a threshold
  2. Unlawful because brokerage requires a licence Correct answer.
  3. Lawful if the person works part-time
  4. Lawful if the client signs a waiver

Explanation

Brokerage activity requires a licence regardless of the size of the commission, the client's consent, or whether the work is full-time or part-time. An unlicensed person who negotiates transactions for reward is practising without authorisation. Waivers and low fees do not cure the absence of a licence.

Question 18Real Estate Broker Licensing (issuance, renewal, cancellation)

A company's commercial registration is cancelled. What is the likely effect on its broker licence?

  1. The broker licence remains unaffected indefinitely
  2. The broker licence converts into an individual licence
  3. The broker licence may be cancelled because the legal entity no longer exists Correct answer.
  4. The broker licence passes to the company's clients

Explanation

A broker licence held by a company depends on the existence of that legal entity. If the commercial registration is cancelled, the entity can no longer lawfully carry on business, so the licence is liable to cancellation. It does not survive indefinitely, convert automatically, or pass to clients.

Question 19Real Estate Broker Licensing (issuance, renewal, cancellation)

When RERA cancels a licence, which action is most consistent with the broker's obligations?

  1. Keep client files indefinitely without any handover
  2. Continue advertising listings under the old number
  3. Return or surrender the licence and cease brokerage Correct answer.
  4. Sell the licence to another firm

Explanation

On cancellation the broker must stop brokerage activity and return or surrender the licence document as directed. Continuing to advertise under a cancelled number misleads the public. Licences cannot be sold, and client records must be handled and handed over in accordance with regulatory requirements rather than simply retained.

Question 20Real Estate Broker Licensing (issuance, renewal, cancellation)

A broker wants to expand into property valuation services in addition to sales brokerage. What is the appropriate first step?

  1. Begin offering valuations and notify RERA at year end
  2. Check whether a separate authorisation or qualification is required Correct answer.
  3. Ask a client to sign a disclaimer instead of licensing
  4. Assume the broker licence covers every property service

Explanation

Different property services may fall under separate regulatory requirements, so the broker should confirm with RERA whether valuation needs additional authorisation or qualifications. Assuming the broker licence covers all services can lead to unlicensed activity. Client disclaimers cannot cure a missing authorisation.

Question 21Real Estate Broker Licensing (issuance, renewal, cancellation)

Which combination of factors would most strongly support a decision to refuse renewal of a broker licence?

  1. A change of office furniture and a new telephone number
  2. Repeated failure to comply with client money rules and unresolved complaints Correct answer.
  3. Attendance at an industry conference
  4. Recruitment of a second negotiator

Explanation

Repeated breaches of client money rules and unresolved complaints go to the heart of fitness and consumer protection, providing strong grounds to refuse renewal. Administrative changes, conference attendance, and staffing are ordinary and do not indicate unsuitability. Renewal decisions focus on compliance and integrity.

Question 22Real Estate Broker Licensing (issuance, renewal, cancellation)

A broker's licence application includes a qualification certificate that the applicant did not actually earn. What is the most serious regulatory consequence?

  1. The applicant may pay a small fee to regularise it
  2. The certificate will simply be rechecked later
  3. The applicant will automatically receive a probationary licence
  4. The application may be refused and the conduct treated as a disciplinary breach Correct answer.

Explanation

Presenting a false qualification is a misrepresentation to the regulator and can lead to refusal of the application and disciplinary action. It is not a minor administrative matter that can be regularised by a fee. No probationary licence arises automatically from misconduct.

Question 23Real Estate Broker Licensing (issuance, renewal, cancellation)

Which statement best explains why broker licences are tied to identified individuals and premises rather than being freely transferable?

  1. To prevent brokers from changing employers
  2. To make licence trading a source of revenue
  3. To preserve accountability for conduct and client protection Correct answer.
  4. To limit the number of brokers to a fixed quota

Explanation

Tying licences to specific individuals and premises ensures the regulator knows who is accountable for brokerage conduct and can supervise client protection effectively. Free transfer would obscure responsibility and undermine enforcement. The purpose is not revenue generation, quotas, or restricting career moves.

Question 24Real Estate Broker Licensing (issuance, renewal, cancellation)

An applicant holds a licence from another country and wants to practise in Bahrain. How should the foreign licence be treated?

  1. It exempts the applicant from identity checks
  2. It is valid in Bahrain without further steps
  3. It must be surrendered before applying
  4. It supports the application but does not replace a Bahraini licence Correct answer.

Explanation

A foreign licence may evidence experience or competence, but brokerage in Bahrain requires a licence from RERA. The applicant must still meet local conditions, including identity verification. Surrendering the foreign licence is not a prerequisite.

Question 25Real Estate Broker Licensing (issuance, renewal, cancellation)

A brokerage firm's licence is cancelled while it holds client funds from ongoing transactions. What is the most appropriate regulatory expectation?

  1. Client funds must be safeguarded and accounted for during wind-down Correct answer.
  2. The firm may abandon the funds
  3. The funds become the firm's property on cancellation
  4. The funds should be used to pay the cancellation fine

Explanation

Client money remains client property and must be safeguarded and properly accounted for even when a licence is cancelled. The regulator expects an orderly wind-down that protects consumers. Cancellation does not convert client funds to the firm's use, justify abandonment, or permit using them for fines.

Question 26Real Estate Broker Licensing (issuance, renewal, cancellation)

Under Bahrain's real estate broker licensing framework, which authority is responsible for issuing, renewing and cancelling broker licences?

  1. The Central Bank of Bahrain
  2. The Bahrain Chamber of Commerce
  3. The Real Estate Regulation Authority (RERA) Correct answer.
  4. The Ministry of Interior

Explanation

Broker licensing in Bahrain is administered by the Real Estate Regulation Authority, which regulates brokerage activity and controls the issuance, renewal and cancellation of licences. Other bodies have separate mandates and do not license brokers.

Question 27Real Estate Broker Licensing (issuance, renewal, cancellation)

What is the standard validity period of a real estate broker licence issued in Bahrain before it must be renewed?

  1. One year Correct answer.
  2. Three years
  3. Ten years
  4. Five years

Explanation

Broker licences in Bahrain are generally issued for a limited term and must be renewed periodically, commonly on an annual basis. Renewal ensures the broker's qualifications, records and compliance remain current.

Question 28Real Estate Broker Licensing (issuance, renewal, cancellation)

An applicant submits a broker licence application. Which element is most essential for RERA to identify the individual who will be professionally accountable?

  1. A list of past clients
  2. A bank reference letter
  3. A marketing plan for the firm
  4. A named qualified broker responsible for the licensed activity Correct answer.

Explanation

Licensing ties professional accountability to a named, qualified individual whose credentials RERA can verify and hold responsible. Marketing plans and client lists do not establish professional competence or accountability.

Question 29Real Estate Broker Licensing (issuance, renewal, cancellation)

A licensed brokerage firm wants to renew its broker licence. Which action best supports a timely renewal?

  1. Submitting the renewal application and required documents before the expiry date Correct answer.
  2. Transferring the licence to an unlicensed employee
  3. Waiting until after expiry and paying a penalty
  4. Relying on the previous year's approval without new documents

Explanation

Timely renewal requires filing the application and supporting documents before the licence expires so the firm remains continuously licensed. Late filing can cause a lapse and interrupt lawful brokerage activity.

Question 30Real Estate Broker Licensing (issuance, renewal, cancellation)

A brokerage firm wishes to add a new partner who will hold a share in the business. How should this change be handled in relation to the broker licence?

  1. Wait until the next renewal cycle to mention it
  2. Apply for a completely new licence and surrender the old one
  3. Notify RERA and update the licence records to reflect the ownership change Correct answer.
  4. Continue operating without informing RERA

Explanation

Material changes to ownership or the licensed entity must be reported to RERA and reflected in the licence records. Failure to disclose ownership changes undermines regulatory oversight and can jeopardise the licence.

Question 31Real Estate Broker Licensing (issuance, renewal, cancellation)

Which practice best demonstrates that a licensed broker is maintaining proper records for licensing purposes?

  1. Discarding records once a deal closes
  2. Keeping transaction records and client documentation in an organised, retrievable form Correct answer.
  3. Recording transactions only when a client requests it
  4. Storing records only on a personal phone

Explanation

Brokers are expected to maintain accurate, organised records of transactions and clients so they can be produced to RERA on request. Poor record-keeping impedes supervision and can support disciplinary action.

Question 32Real Estate Broker Licensing (issuance, renewal, cancellation)

A broker's licence is due to expire and the broker is unsure whether renewal has been approved. What is the most prudent course of action?

  1. Ask a colleague to use their licence for the deals
  2. Assume renewal is automatic and proceed
  3. Refrain from new brokerage activity until renewal is confirmed Correct answer.
  4. Continue signing new listings as normal

Explanation

Until renewal is confirmed, the broker should avoid new brokerage activity to prevent operating on an unconfirmed licence. Borrowing another person's licence is improper and would compound the breach.

Question 33Real Estate Broker Licensing (issuance, renewal, cancellation)

Which circumstance would most appropriately lead RERA to refuse to issue a broker licence to an applicant?

  1. The applicant fails to demonstrate the required qualifications or good standing Correct answer.
  2. The applicant operates from a small office
  3. The applicant has never sold a property before
  4. The applicant prefers to work part-time

Explanation

Issuance depends on meeting qualification and good-standing requirements; failing these is a legitimate ground for refusal. Lack of sales experience, office size or working hours are not licensing criteria.

Question 34Real Estate Broker Licensing (issuance, renewal, cancellation)

A licensed broker plans to change the address of the licensed office. What should the broker do first?

  1. Keep the old address on all documents
  2. Move immediately and inform RERA at year end
  3. Ask clients to confirm the change instead
  4. Notify RERA and seek to update the licence to reflect the new premises Correct answer.

Explanation

Because licences are tied to identified premises, a change of office address should be reported to RERA and reflected in the licence before or as the move occurs. Delayed or omitted disclosure leaves the licence inaccurate.

Question 35Real Estate Broker Licensing (issuance, renewal, cancellation)

Which factor is most relevant to RERA when deciding whether a broker licence should be cancelled for cause?

  1. A change in the broker's marketing strategy
  2. A decline in the broker's annual sales
  3. A single late submission of a routine form
  4. Serious or repeated breaches of licensing and conduct rules Correct answer.

Explanation

Cancellation for cause is generally reserved for serious or repeated breaches of licensing and conduct obligations. Minor administrative slips, marketing choices or sales performance are not ordinarily grounds for cancellation.

Question 36Real Estate Broker Licensing (issuance, renewal, cancellation)

A broker licence has been cancelled. What is the broker's most appropriate immediate obligation regarding advertising?

  1. Keep advertising until clients notice the change
  2. Stop advertising brokerage services and remove references to the cancelled licence Correct answer.
  3. Continue advertising but omit the licence number
  4. Advertise under a partner's licence number

Explanation

Once a licence is cancelled, the broker must cease holding out as a licensed broker and remove advertising that relies on the cancelled licence. Continuing to advertise misleads the public and breaches licensing rules.

Question 37Real Estate Broker Licensing (issuance, renewal, cancellation)

A brokerage firm's licence application names a manager who will supervise the firm's brokerage activity. Why does RERA require such a named supervisor?

  1. To ensure a qualified person is accountable for the firm's compliance with licensing rules Correct answer.
  2. To reduce the number of staff the firm hires
  3. To guarantee the firm makes a profit
  4. To allow the firm to avoid keeping records

Explanation

Naming a qualified supervisor ensures there is an identifiable person accountable for the firm's compliance with licensing and conduct rules. Profitability, staffing levels and record-keeping duties are not the purpose of this requirement.

Question 38Real Estate Broker Licensing (issuance, renewal, cancellation)

An applicant for a broker licence has a prior regulatory penalty for unlicensed brokerage activity. How should RERA most likely treat this in the application?

  1. Ignore it because it predates the application
  2. Automatically approve the licence to avoid delay
  3. Weigh it as a relevant factor in assessing fitness and good standing Correct answer.
  4. Treat it as irrelevant to licensing decisions

Explanation

Past regulatory breaches are relevant to whether an applicant meets fitness and good-standing requirements. RERA may consider such history when deciding whether to grant a licence.

Question 39Real Estate Broker Licensing (issuance, renewal, cancellation)

A licensed broker wishes to take a temporary leave of absence for several months. What is the most appropriate way to manage the licence during this period?

  1. Notify RERA and arrange for the licensed activity to be properly supervised or suspended as required Correct answer.
  2. Leave the licence unattended and let unlicensed staff run the business
  3. Hand the licence number to a friend to use
  4. Close the office without informing RERA

Explanation

Absences should be managed transparently, with RERA notified and the licensed activity either properly supervised or suspended in line with requirements. Allowing unlicensed staff to operate or lending the licence number breaches licensing rules.

Question 40Real Estate Broker Licensing (issuance, renewal, cancellation)

Which statement best explains why broker licences are renewed periodically rather than granted once for life?

  1. Renewal removes the need for any initial application
  2. Periodic renewal lets RERA verify that qualifications, records and conduct remain compliant over time Correct answer.
  3. Renewal prevents brokers from ever changing employers
  4. Renewal exists mainly to generate revenue

Explanation

Periodic renewal provides a recurring checkpoint at which RERA can confirm that the broker still meets qualification, record-keeping and conduct standards. It is a supervisory mechanism rather than a revenue measure or a restriction on employment.

Question 41Anti-Money Laundering & Terrorist Financing Obligations

Under Bahrain's anti-money laundering law, which activity is the core definition of money laundering?

  1. Converting or transferring property known to be proceeds of crime to conceal its origin Correct answer.
  2. Lending money to a client without a written contract
  3. Trading in foreign currency without a licence
  4. Failing to file a tax return on time

Explanation

Money laundering is the process of disguising the criminal origin of property so that it appears legitimately obtained. The offence covers converting, transferring, concealing or acquiring proceeds of crime, and assisting another person to do so. Merely breaching a tax filing or licensing rule does not by itself constitute laundering.

Question 42Anti-Money Laundering & Terrorist Financing Obligations

Which of the following best describes terrorist financing as distinct from money laundering?

  1. It requires the funds to cross an international border
  2. It only applies to funds already proven to be criminal proceeds
  3. It can involve legally obtained funds directed to terrorist purposes Correct answer.
  4. It always involves large sums moved through banks

Explanation

Terrorist financing focuses on the destination and purpose of funds rather than their source. Money from lawful sources, including donations or salaries, can become terrorist financing once intended for terrorist activity. This is why the offence does not require proof that the money was criminal in origin.

Question 43Anti-Money Laundering & Terrorist Financing Obligations

What is the primary purpose of customer due diligence in a Bahraini real estate brokerage?

  1. To confirm that the property has a valid title deed
  2. To increase the commission earned on each transaction
  3. To replace the need for internal reporting to the regulator
  4. To identify and verify the customer and understand the purpose of the relationship Correct answer.

Explanation

Customer due diligence requires an institution to identify its customer, verify that identity using reliable documents, and understand the purpose and intended nature of the business relationship. It is a risk-management and reporting obligation, not a commercial or conveyancing function. Title checks are a separate legal matter.

Question 44Anti-Money Laundering & Terrorist Financing Obligations

When must a real estate broker conduct customer due diligence in relation to a property sale?

  1. Only if the buyer is a foreign national
  2. Only after the sale price has been fully paid
  3. Before or at the time of establishing the business relationship or carrying out the transaction Correct answer.
  4. Only when the regulator requests the file

Explanation

Due diligence must be completed before or at the moment the relationship is established or the occasional transaction is executed. It cannot be deferred until after completion or until a supervisor asks for the file. Nationality is not the trigger, although it may affect the risk rating.

Question 45Anti-Money Laundering & Terrorist Financing Obligations

A broker must report a suspicious transaction to which body in Bahrain?

  1. The Bahrain Chamber of Commerce
  2. The Financial Intelligence Directorate Correct answer.
  3. The Ministry of Justice
  4. The Bahrain Bourse

Explanation

Suspicious transaction reports are submitted to Bahrain's financial intelligence unit, the Financial Intelligence Directorate. The directorate receives, analyses and disseminates the reports to law enforcement and other competent authorities. Other bodies listed do not perform this function.

Question 46Anti-Money Laundering & Terrorist Financing Obligations

Which record-keeping standard applies to customer identification documents in Bahrain?

  1. Records may be destroyed once the commission is paid
  2. Records must be kept for one year and then transferred to the customer
  3. Records must be kept for at least five years after the relationship ends or the transaction is completed Correct answer.
  4. Records must be kept for six months only

Explanation

Bahraini rules require institutions to retain customer identification records and transaction records for a minimum period, commonly five years after the end of the relationship or completion of the transaction. Records must remain available to supervisors and law enforcement on request. Shorter periods do not satisfy the obligation.

Question 47Anti-Money Laundering & Terrorist Financing Obligations

What does a politically exposed person designation primarily affect?

  1. The validity of the property title
  2. The currency in which the transaction must be settled
  3. The level of due diligence and senior management approval applied Correct answer.
  4. The commission rate charged to the client

Explanation

A politically exposed person, or an associate or family member of one, presents higher risk because of the potential for misuse of public office. Institutions must apply enhanced due diligence, including establishing the source of wealth and funds and obtaining senior management approval. It does not change pricing, title validity or settlement currency.

Question 48Anti-Money Laundering & Terrorist Financing Obligations

Which behaviour should prompt a broker to submit a suspicious transaction report?

  1. A buyer insisting on paying a large amount in cash and refusing to explain the source of funds Correct answer.
  2. A buyer requesting a receipt for a cash deposit
  3. A seller asking to see the title deed
  4. A client asking for a discount on commission

Explanation

Unexplained large cash payments, especially when combined with reluctance to disclose the source of funds, are classic red flags in real estate transactions. Such conduct should be escalated and reported promptly. Ordinary commercial requests such as receipts or discounts are not suspicious in themselves.

Question 49Anti-Money Laundering & Terrorist Financing Obligations

A broker receives a suspicious transaction report request from a client who asks whether a report has been filed. What is the correct response?

  1. Explain the details of the report
  2. Promise to file a report after completion
  3. Confirm that a report has been filed
  4. Neither confirm nor disclose that a report has been or will be made Correct answer.

Explanation

Tipping off is prohibited: an institution and its staff must not disclose that a suspicious transaction report has been or will be submitted. Disclosure can alert the subject and undermine the investigation, and may itself be a criminal offence. The client should be dealt with normally without revealing reporting activity.

Question 50Anti-Money Laundering & Terrorist Financing Obligations

A brokerage identifies a client as high risk after an initial assessment. What is the appropriate next step?

  1. Proceed with standard due diligence but file a report afterwards
  2. Reduce the checks because the client has been a customer for years
  3. Decline all business with the client automatically
  4. Apply enhanced due diligence including deeper source of funds and wealth checks Correct answer.

Explanation

Higher risk requires enhanced measures proportionate to that risk, such as additional identity information, deeper source of funds and wealth verification, and more frequent monitoring. Automatic refusal is not required, and reducing checks for long-standing customers is never acceptable. Reporting is required only where suspicion arises.