Record keeping requirements for financial entities

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September 2020

This guidance on record keeping is applicable to financial entities that are subject to the Proceeds of Crime (Money Laundering) and Terrorist Financing Act (PCMLTFA) and associated Regulations.

In order to comply with your record keeping requirements, you are required to keep records in a manner in which they can be provided to FINTRAC within 30 days upon request. These records may also be requested through a judicial order by law enforcement to support an investigation of money laundering or terrorist activity financing. A record (or a copy) may be kept in a machine-readable or electronic form, so long as a paper copy can easily be produced.

Employees who keep records for you are not required to keep them after the end of their employment with you. The same is true for individuals in a contractual relationship with you, after the end of that contractual relationship. This means that you have to obtain and keep the records that were kept for you by any employee or contractor before the end of that individual's employment or contract with you.

There may be situations where you are required to keep records for purposes other than your requirements under the PCMLTFA. For example, a federal or provincial regulator for your sector may require you to keep records in addition to those described in this guidance. If this is the case, you must still meet the requirements described in this guidance. For example, the retention period for your records can be longer than what is described, but it cannot be shorter.

Please note that as a financial entity, you have record keeping requirements in addition to those described in this guidance. These additional requirements are detailed in the following Know your client guidance documents:

As a financial entity, you must keep the following records:

  1. Suspicious transaction report records
  2. Large cash transaction records
  3. Records of transactions of $3,000 or more
    1. If you receive $3,000 or more for the issuance of traveller's cheques, money orders or other similar negotiable instruments
    2. If you redeem $3,000 or more in one or multiple money orders
  4. Records of electronic funds transfers of $1,000 or more
  5. Foreign currency exchange transaction records
  6. Account opening records
    1. Signature cards
    2. Intended use of an account
    3. Accounts for individuals or entities other than corporations
    4. Accounts for corporations
    5. Account records created in the normal course of business
  7. Account records
    1. Deposit slips
    2. Account statements
    3. Cleared cheque records
  8. Credit arrangement records
  9. Credit card account opening records
  10. Trust records
  11. Reasonable measures records

**Note: Exceptions to your record keeping requirements are listed in the last section of this guidance.

**Note: When recording the nature of the principal business or occupation of a client, you must be as descriptive as possible in order to be able to determine whether a transaction or activity is consistent with what would be expected for that client. For example, in the case of a person who is a manager, the occupation recorded should reflect the area of management, such as “hotel reservations manager” or “retail clothing store manager.” The same is true when recording the nature of the principal business of an entity. For example, in the case of an entity in the field of sales, the nature of the principal business should specify the type of sales, such as “pharmaceutical sales” or “retail sales”.

1. Suspicious transaction report records

If you submit a suspicious transaction report (STR) to FINTRAC, you must keep a copy of it. This includes STRs for completed and attempted transactions.

Retention: You must keep STRs for at least five years from the date the report was submitted.

2. Large cash transaction records

You must keep a record of every large cash transaction. A large cash transaction occurs when you receive $10,000 or more in cash from a client in a single transaction. A large cash transaction also occurs when there are multiple cash transactions of less than $10,000 each that total $10,000 or more within a 24-hour period, when you know they are conducted by, or on behalf of, the same individual or entity.

When a client conducts a large cash transaction, your record must indicate the receipt of an amount of $10,000 or more in cash, along with the following:

If the large cash transaction is received for deposit, you must keep a record of:

In any case other than a deposit, the large cash transaction record must include the name of the individual from whom you received the cash and that individual's address, date of birth, and principal business or occupation.

Retention: You must keep large cash transaction records for at least five years from the date the record was created.

3. Record of transactions of $3,000 or more

a. If you receive $3,000 or more for the issuance of traveller's cheques, money orders or other similar negotiable instruments, you must record the:

b. If you redeem a total of $3,000 or more in one or multiple money orders, you must record the:

Retention: You must keep a record of transactions of $3,000 or more for at least five years from the date the record was created.

4. Records of electronic fund transfers of $1,000 or more

When you send an electronic funds transfer (EFT) of $1,000 or more at the request of a client, including an EFT sent within Canada that is a SWIFT MT 103 message, you must record:

If you send an EFT in any amount at the request of a client, including an EFT sent within Canada that is a SWIFT MT 103 message, you must include originator information.

If you receive an EFT in any amount, including an EFT sent within Canada that is a SWIFT MT 103 message, you must take reasonable measures to ensure that it includes originator information. In this context, reasonable measures could include contacting the institution that sent the payment instructions.

Retention: You must keep electronic funds transfer records for at least five years from the date the record was created.

5. Foreign currency exchange transaction records

You must keep a transaction ticket for every foreign currency exchange transaction you conduct, regardless of the amount. Each transaction ticket must include:

Retention: You must keep foreign currency exchange tickets for at least five years from the date the record was created.

6. Account opening records

Every time you open an account for a client, you must keep the following records:

a. Signature cards

You must keep a record of a signature card for each account holder of that account. A signature card is a document signed by an individual authorized to give instructions on an account, or electronic data that constitutes the signature. It can include the handwritten signature of an individual or an electronic signature that is created or adopted by an individual. The electronic signature can be numeric, character-based, or biometric, so long as it is unique to the individual and a record can be kept.

An electronic signature may be encrypted. For example, a personal identification number (PIN) can be used as an electronic signature. FINTRAC’s expectation is that it will be able to review a document during an examination, but the “electronic signature” does not need to be unencrypted.

You must keep signature card records for individual members of group plan accounts when contributions are not made by payroll deduction, by the plan’s sponsor or when the existence of the plan sponsor is not confirmed.

You can keep a single signature card record for a client with multiple accounts; you do not need to create a new signature card record every time the client opens a subsequent account.

Retention: You must keep signature cards for at least five years from the day the account is closed.

b. Intended use of an account

You must keep a record of the intended use of an account.

Examples of intended use for personal accounts include the following:

Examples of the intended use for business accounts include the following:

Retention: You must keep intended use of an account records for at least five years from the day the account is closed.

c. Accounts for individual or entities other than corporations

When you open an account for an individual you must record the name, address, date of birth and the nature of their principal business or occupation.

When you open an account for an entity other than a corporation, you must record its name, address and the nature of its principal business.

Retention: You must keep these records for at least five years from the date they were created.

d. Accounts for corporations

When you open an account for a corporation, you must keep a copy of the part of official corporate records that contains any provision relating to the power to bind the corporation regarding the account.

Retention: You must keep these records for at least five years from the date they were created.

e. Account records created in the normal course of business

You must keep the following records if they are created in the normal course of operating your business:

Retention: You must keep account operating agreements for at least five years from the closure of the account. Whereas, you must keep debit or credit memos for at least five years from the date they were created.

7. Account records

a. Deposit slips

You must keep a deposit slip for every deposit to an account. A deposit slip means a record that includes:

Retention: You must keep all deposit slips for at least five years from the date they were created.

b. Account statements

You must keep a copy of every account statement you send to a client.

Retention: You must keep these records for at least five years from the date they were created.

c. Cleared cheque records

You must keep a record of every cleared cheque drawn on an account, and a copy of every cleared cheque that is deposited to an account. This does not apply to cheques drawn on an account and deposited to an account at the same branch of your financial entity. It also does not apply if an image of the cheque has been recorded electronically or on microfilm and can be readily produced.

Retention: You must keep these records for at least five years from the date they were created.

8. Credit arrangement records

You are required to keep the following information with respect to a credit arrangement that you have entered into with a client:

Please note that it continues to be a best practice to also keep a record of the name of the business or place of work.

Retention: You must keep credit arrangement records for at least five years from the day the account is closed.

9. Credit card account opening records

Every time that you open a credit card account, you have to keep the following records:

Retention: You must keep every credit card application that you receive from a client for at least five years from the closure of the account.

You must keep other credit card account opening records for at least five years from the date they were created.

10. Trust records

A trust company is a financial entity that is regulated by the Trust and Loan Companies Act or by an equivalent provincial Act. As a trust company you have obligations to keep records that are related to trusts.

A trust is a legal agreement in which financial assets are held by an individual or entity (a trustee) in trust for the benefit of another individual, group of persons or entity (beneficiaries). The settlor of a trust is an individual or entity that creates a trust with a written trust declaration. A settlor includes any individual or entity that contributes financially to that trust, either directly or indirectly.

In addition to the transaction and account records, you must keep the following records for every trust where you are trustee:

You may also have record keeping obligations for certain institutional and personal trusts. Institutional trusts are established by a corporation, partnership or other entity for a particular business purpose. Whereas, personal trusts (inter vivos) are established by a living individual for the benefit of another individual, such as a trust created by a parent for a child where its assets can be distributed to the beneficiary during or after the settlor’s lifetime.

If the trust is an institutional trust and the settlor is a corporation, you have to keep a copy of the part of the official corporate records that contains any provision relating to the power to bind the settlor/corporation in respect of the trust.

If the trust is a personal trust (other than a trust created by a will), you have to keep a record about each of the beneficiaries that are known to you. The information required in this record is the name, address and the nature of its principal business if the beneficiary is an entity. If the beneficiary is an individual, you have to record their name, address, date of birth and the nature of their principal business or their occupation. This information needs to be recorded for each beneficiary at the time you become a trustee for the trust.

11. Reasonable measures records

The term “reasonable measures” refers to activities you are expected to undertake in order to meet certain obligations. The PCMLTFA and associated Regulations explicitly state when you must take reasonable measures to meet an obligation.

As of June 17, 2017, the Proceeds of Crime (Money Laundering) and Terrorist Financing Regulations have been changed to require that a record be kept when reasonable measures were taken, but were unsuccessful. A reasonable measure is unsuccessful when you do not obtain a response, such as a yes or no, and you are unable to make a conclusive determination. Refer to section 67.3 of the Regulations for every activity where you are required to keep records when reasonable measures were unsuccessful.

When reasonable measures are unsuccessful, you must record the following information:

You must outline the reasonable measures that you take in your compliance policies and procedures. This can form part of your unsuccessful reasonable measures record, or you could document, on a case-by-case basis, the measure taken in each record for unsuccessful reasonable measures.

For example, if you ask a client if they are conducting a large cash transaction on behalf of a third party and they refuse to answer – your record should indicate that you asked, the date you asked and the fact that the client refused to answer yes or no.

Should you take a measure that is not included in your policies and procedures, you would have to include details of that measure taken in your record of unsuccessful reasonable measures.

Retention: You must keep records of your unsuccessful reasonable measures for at least five years following the date they were created.

Exceptions to record keeping requirements

If you are carrying on activities as a credit card acquiring business, the record keeping requirements described in this guideline do not apply to those activities. A credit card acquiring business is a financial entity that has an agreement with a merchant to provide the following services:

If you are required to keep a record about information that is readily available in other records that you have kept, you do not have to record the same information again. This means that if you keep the required information and can produce it during a FINTRAC examination you do not need to create a new record to meet your obligations.

You are not required to keep the following records if you open an account, including a credit card account, or conduct a transaction for a public body or a very large corporation. The same is true regarding a subsidiary for either of those entities, if the financial statements of the subsidiary are consolidated with those of the public body or very large corporation.

You are not required to keep a large cash transaction record if the cash is received from another financial entity or a public body.

If you open an account or a credit card account for a corporation that is a securities dealer, you do not have to keep records of the names of the corporation’s directors.

You are not required to keep the transaction and account records identified in this guidance for the following activities:

Date Modified: