SIDC Module 6 Market conduct, client treatment and AML/CFT question: reporting institution identify

SIDC Module 6Market conduct, client treatment and AML/CFT

Delima Sdn Bhd is owned directly by four individuals: Ali 30%, Beng 25%, Chandra 20% and Devi 25%. Under the first cascading step, whom must the reporting institution identify as beneficial owner?

A None, as nobody holds more than 50%
B Ali only
C Ali, Beng and Devi
D All four shareholders

Show the answer and explanation

Answer: B. Ali only

Paragraph 8.1.11(a) of the SC's AML/CFT/CPF Guidelines starts the cascade with natural persons who ultimately have a controlling ownership interest, which for a corporation includes shareholders with an equity interest of more than twenty-five percent. Only Ali's 30% exceeds that level. Beng and Devi hold exactly 25%, which is not more than 25%, so treating 25% as enough is the classic boundary error. Listing all four ignores the threshold, and requiring a majority stake applies the wrong test. Because a beneficial owner is found at step (a), the institution need not move on to steps (b) and (c). Source: SC Guidelines on Prevention of Money Laundering, Countering Financing of Terrorism, Countering Proliferation Financing and Targeted Financial Sanctions for Reporting Institutions in the Capital Market (SC-GL/AML-2014 (R3-2024), revised 13 June 2024) paras 8.1.10-8.1.11; Appendix E para 1.7 (as at October 2026).

Common mistake

Reading 'more than 25%' as '25% or more' wrongly pulls in shareholders sitting exactly on 25%.

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Original study material mapped to the public SIDC Module 6 syllabus. Unofficial, not endorsed by SIDC or the SC. Verify figures and rules against current guidance before relying on them.