Information for:
Securities dealers

Your Obligations

The following summary of the legislative requirements under the PCMLTFA applies to you if you are a securities dealer. A securities dealer is an individual or entity authorized under provincial legislation to engage in the business of dealing in securities or any other financial instruments or to provide portfolio management or investment advising services.

For information about legislative requirements in effect before June 23, 2008, see the applicable guidelines published before 2008.

• Reporting
  • Suspicious Transactions
  • Terrorist Property
  • Large Cash Transactions
• Record Keeping
• Ascertaining Identity
• Politically Exposed Foreign Person
• Third Party Determination
• Compliance Regime

Information for: Securities dealers (PDF version, 57 kb) 

Additional Information for Securities Dealers

• Penalties for Non-compliance
• FINTRAC Interpretation Notices
• Compliance Questionnaire

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Reporting

• Suspicious transactions
  You must report where there are reasonable grounds to suspect that a transaction or an attempted transaction is related to the commission or attempted commission of a money laundering offence or a terrorist activity financing offence.
  
  See Guideline 2: Suspicious Transactions and Guideline 3: Submitting Suspicious Transaction Reports to FINTRAC
  
  
• Terrorist property
  You must report where you know that there is property in your possession or control that is owned or controlled by or on behalf of a terrorist or a terrorist group.
  
  See Guideline 5: Submitting Terrorist Property Reports to FINTRAC
  
  
• Large cash transactions
  You must report large cash transactions involving amounts of $10,000 or more received in cash.
  
  See Guideline 7: Submitting Large Cash Transaction Reports to FINTRAC
  
  

Record Keeping

You must keep the following records:

• Large cash transaction records
• Signature cards, account operating agreements or accounts applications
• Copies of official corporate records (binding provisions)
• Account holder information
• New account applications
• Confirmations or purchase or sale
• Guarantees
• Trade authorizations
• Powers of attorney
• Joint account agreements
• Correspondence pertaining to the operation of accounts
• Account statements
• Intended use of an account
• Copies of suspicious transaction reports
• Beneficial ownership records

See Guideline 6E: Record Keeping and Client Identification for Securities Dealers

Ascertaining Identity

You must take specific measures to identify the following individuals or entities:

• Any individual who conducts a large cash transaction
• Any individual who signs a signature card
• Any individual who is authorized to give instructions for an account
• Any corporation or other entity for which you open an account (including reasonable measures to obtain beneficial ownership information)
• Any individual for whom you have to send a suspicious transaction report (reasonable measures and exceptions apply)
• Any individual member of a group plan account when contributions to the plan are not made by payroll deductions or by the plan’s sponsor

See Guideline 6E: Record Keeping and Client Identification for Securities Dealers

Politically Exposed Foreign Person

You have to take reasonable measures to determine whether you are dealing with a politically exposed foreign person for new or existing accounts. You also have to keep records and take additional measures.

See Guideline 6E: Record Keeping and Client Identification for Securities Dealers

Third Party Determination

Where a large cash transaction record is required, you must take reasonable measures to determine whether the individual is acting on behalf of a third party. When an account is opened, you must take reasonable measures to determine whether it is to be used by or on behalf of a third party.

In cases where a third party is involved, you must obtain specific information about the third party and their relationship with the individual providing the cash or account holder.

See Guideline 6E: Record Keeping and Client Identification for Securities Dealers

Compliance Regime

The following five elements must be included in a compliance regime:

• The appointment of a compliance officer
• The development and application of written compliance policies and procedures
• The assessment and documentation of risks of money laundering and terrorist financing, and measures to mitigate high risks
• Implementation and documentation of an ongoing compliance training program
• A documented review of the effectiveness of policies and procedures, training program and risk assessment

See Guideline 4: Implementation of a Compliance Regime

Penalties for Non-compliance

Non-compliance with Part 1 of the Proceeds of Crime (Money Laundering) Terrorist Financing Act may result in criminal or administrative penalties.

FINTRAC Interpretation Notice

FINTRAC issues FINTRAC interpretation notices (FINs) to provide technical interpretations and positions regarding certain provisions contained in the Proceeds of Crime (Money Laundering) and Terrorist Financing Act and associated Regulations.

• The 24-hour Rule

For more information on your obligations and on FINTRAC, you can also consult our Frequently Asked Questions.

Compliance Questionnaire

Part of FINTRAC's mandate is to ensure compliance by financial intermediaries and other reporting entities with their obligations under the Proceeds of Crime (Money Laundering) and Terrorist Financing Act and regulations. To do this, we can inquire into your business and examine records, including those relating to your compliance regime.

We have developed a securities dealers compliance questionnaire, for you to provide information concerning you or your organization’s compliance regime. If you are required to complete this questionnaire, you will be advised in writing by FINTRAC. View a list of the questions contained in the questionnaire.

For any questions, please contact us by e-mail at questionnaires@fintrac-canafe.gc.ca. If you do so, be sure to indicate your company/organization name as well as your reporting entity sector.