Record keeping requirements for securities dealers

June 2017 

June 2017

This guidance on record keeping is applicable to securities dealers 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 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 securities dealer, 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 securities dealer, you must keep the following records:

  1. Suspicious transaction report records
  2. Large cash transaction records
  3. Account opening records
    1. Signature card, account operating agreement or account application
    2. Intended use of the account
    3. Accounts for individuals or entities other than corporations
    4. Accounts for corporations
  4. Records created in the normal course of business
  5. Client statements
  6. 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 an STR 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:

  • the name, date of birth and address of the individual from whom you received the cash and the nature of their principal business or occupation;
  • the amount and currency of the cash received;
  • the date of the transaction;
  • the purpose and details of the transaction, including:
    • the type of transaction (for example, the cash was used to buy securities, etc.); and
    • whether any other individuals or entities were involved in the transaction;
  • how the cash was received (for example, in person, by mail, by armoured car, or any other way); and
  • if an account was affected by the transaction, include the:
    • account number and type;
    • full name of the account holder; and
    • the currency in which the transactions are conducted in the account.

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

3. Account opening records

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

a. Signature card, account operating agreement or account application

You must keep a record of a signature card for every individual authorized to give instructions on the account, or an account operating agreement or account application that contains the individual’s signature. 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 client’s 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, account operating agreements, and account application forms 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 accounts include the following:

  • investments for the eventual payment of children's education;
  • investments for retirement;
  • investments of the retained earnings of a corporation; and
  • investments for a group plan.

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 individuals or entities other than corporations

When you open an account for an individual, you must keep a record their 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 keep a record of 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.

  • This could be a certificate of incumbency, the articles of incorporate or the bylaws of the corporation that set out the officers duly authorized to sign on behalf of the corporation, such as the president, treasurer, vice-president, comptroller, etc.
  • If there were changes made to the articles or bylaws that relate to the power to bind the corporation regarding the account, and these changes were applicable at the time the account was opened, then the board resolution stating the change would be included in this type of record.

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

4. 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:

  • new account applications;
  • confirmations of purchase or sale;
  • guarantees;
  • trade authorizations;
  • powers of attorney and joint account agreements; and
  • all correspondence, including emails, about the operation of accounts.

Retention: You must keep new account applications for at least five years from the day the account is closed. You must keep all other records created in the normal course of business for at least five years from the date they were created.

5. Client statements

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

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

6. 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:

  • the measures taken;
  • the date on which each measure was taken; and
  • the reasons why the measures were unsuccessful.

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 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 transaction or keep account records, as listed above, if the cash is received from 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 a financial entity or a public body.

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

  • the purchase of an exempt policy as defined in subsection 306(1) of the Income Tax Regulations;
  • the purchase of a group life insurance policy that does not provide for a cash surrender value or a savings component;
  • the purchase of an immediate or deferred annuity that is paid for entirely with funds that are directly transferred from a registered pension plan or from a pension plan that is required to be registered under the Pension Benefits Standards Act, 1985, or similar provincial legislation;
  • the purchase of a registered annuity policy or a registered retirement income fund;
  • the purchase of an immediate or deferred annuity that is paid for entirely with the proceeds of a group life insurance policy;
  • a transaction that is part of a reverse mortgage or of a structured settlement;
  • the opening of an account for the deposit and sale of shares from a corporate demutualization or the privatization of a Crown corporation;
  • the opening of an account in the name of an affiliate of a financial entity, if that affiliate carries out activities that are similar to those of persons and entities referred to in paragraphs 5(a) to (g) of the Act (financial entity, life insurance or securities dealer);
  • the opening of a registered plan account, including a locked-in retirement plan account, a registered retirement savings plan account and a group registered retirement savings plan account;
  • the opening of an account established pursuant to the escrow requirements of a Canadian securities regulator or Canadian stock exchange or any provincial legislation;
  • the opening of an account where the account holder or settlor is a pension fund that is regulated by or under an Act of Parliament or of the legislature of a province;
  • the opening of an account in the name of, or in respect of which instructions are authorized to be given by, a financial entity, a securities dealer or a life insurance company or by an investment fund that is regulated under provincial securities legislation;
  • in the case of a group plan account, you do not have to keep a signature card for any individual member of the plan if the plan's sponsor is an entity whose existence you have already confirmed and the member’s contributions are made by the sponsor of the plan or by means of payroll deductions;
  • an account opened solely to provide customer accounting services to a securities dealer.
March 2021 

March 2021

This guidance comes into effect on June 1, 2021.

Securities dealers have record keeping requirements under the Proceeds of Crime (Money Laundering) and Terrorist Financing Act (PCMLTFA) and associated Regulations.

This guidance outlines certain record keeping requirements for securities dealers. You have additional record keeping requirements that are detailed in the following guidance:

This document answers the following questions:

  1. What records must I keep and what must they contain?
  2. What are my responsibilities when maintaining records?
  3. What are the exceptions to the record keeping requirements?

**Note: Throughout this guidance, all references to dollar amounts (such as $10,000) are in Canadian dollars.

1. What records must I keep and what must they contain?

You must keep the following records:

  1. Reports—a copy of every report sent to FINTRAC
    • Suspicious Transaction Reports
    • Terrorist Property Reports
    • Large Cash Transaction Reports
    • Large Virtual Currency Transaction Reports
  2. Large cash transaction records
  3. Large virtual currency transaction records
  4. Account records
    • Records for account holders and persons authorized to give instructions
    • Signature cards
    • Intended use of an account
    • Other account records

**Note: When you are required to keep records about clients, you should be as descriptive as possible. Being descriptive when recording the nature of the principal business or occupation of a client will help determine whether a transaction or activity is consistent with what would be expected for that client. For example, when the client's occupation is "manager", the record should reflect the area of management, such as "hotel reservations manager" or "retail clothing store manager". When an entity's principal business area is "sales", the record should specify the type of sales, such as "pharmaceutical sales" or "retail sales".

a. Reports– a copy of every report sent to FINTRAC

You must keep a copy of every report that you submit to FINTRAC as a record.

Suspicious Transaction Reports

When you submit a Suspicious Transaction Report (STR) to FINTRAC, you must keep a copy of it.Footnote 1

Retention: At least five years after the day the STR was submitted.Footnote 2

Terrorist Property Reports

When you submit a Terrorist Property Report (TPR) to FINTRAC, you must keep a copy of it.Footnote 3

Retention: At least five years after the day the TPR was submitted.Footnote 4

Large Cash Transaction Reports

When you submit a Large Cash Transaction Report (LCTR) to FINTRAC, you must keep a copy of it.Footnote 5

Retention: At least five years from the date the LCTR was created.Footnote 6

Large Virtual Currency (VC) Reports

When you submit a Large VC Transaction Report (LVCTR) to FINTRAC, you must keep a copy of it.Footnote 7

Retention: At least five years from the date the LVCTR was created.Footnote 8

b. Large cash transaction records

You must keep a large cash transaction record when you receive $10,000 or more in cash in a single transaction.Footnote 9

If you authorize a person or entity to receive funds on your behalf, and that person or entity receives $10,000 or more in cash in accordance with the authorization, you are deemed to have received the amount when it is received by the person or entity, and you must keep a large cash transaction record.Footnote 10

**Note: This obligation is subject to the 24-hour rule.Footnote 11

A large cash transaction record must include:Footnote 12

  • the date you received the cash;
  • if the amount is received for deposit into an account:
    • the account number(s);
    • the name of each account holder—if the cash was deposited to more than one client account, all names must be included in the record; and
    • the time of the deposit, if it was made during your normal business hours, or an indication of "night deposit" if the deposit was made outside of business hours;
  • for any person involved in the transaction (including the person from whom you received the cash), their name, address, date of birth, and occupation, or in the case of a sole proprietor, the nature of their principal business;
  • for any entity involved in the transaction (including the entity from which you received the cash), their name, address and nature of their principal business;
  • the type and amount of each fiat currency received;
  • the purpose of the transaction (for example, the cash was used to buy securities, etc.);
  • the method by which you received the cash (for example, in person, by mail, by armoured car, etc.);
  • the exchange rates used and their source (if applicable);
  • if other accounts are affected by the transaction, include:
    • the account number and type of account (for example, business, personal, etc.); and
    • the name of each account holder;
  • every reference number connected to the transaction that is meant to be similar to an account number;
  • the following details about the remittance (i.e. the disposition) of, or the exchange for, the cash received:
    • the method of remittance;
    • if the remittance is in funds, the type and amount of each type of funds involved;
    • if the remittance is not in funds, the type of remittance (for example, virtual currency, etc.) and value if different from the amount received in cash; and
    • the name of every person or entity involved in the remittance, their account number or policy number. In the absence of either number, their identifying number.

Retention: At least five years from the date the record was created.Footnote 13

c. Large virtual currency (VC) transaction records

You must keep a large VC transaction record when you receive VC in an amount equivalent to $10,000 or more in a single transaction.Footnote 14

If you authorize a person or entity to receive VC on your behalf, and that person or entity receives VC in an amount equivalent to $10,000 or more in accordance with the authorization, you are deemed to have received the amount when it is received by the person or entity, and you must keep a large VC transaction record.Footnote 15

**Note: This obligation is subject to the 24-hour rule.Footnote 16

A large VC transaction record must include:Footnote 17

  • the date you received the VC;
  • if you received the amount for deposit into an account, the name of each account holder;
  • for any person involved in the transaction (including the person from whom you received the VC), their name, address, date of birth, and occupation, or in the case of a sole proprietor, the nature of their principal business;
  • for any entity involved in the transaction (including the entity from which you received the VC), their name, address and the nature of their principal business;
  • the type and amount of each VC involved in the receipt;
  • the exchange rates used and their source;
  • if other accounts are affected by the transaction, include:
    • the account number and type of account; and
    • the account holder's name;
  • every reference number connected to the transaction that is similar to an account number; and
  • every transaction identifier (this may include a transaction hash or a similar identifier, if applicable), and every sending and receiving address.

Retention: At least five years from the date the record was created.Footnote 18

d. Account records

For every account opened for a client, you must keep the following records:

Records for account holders and persons authorized to give instructions

You must keep a record for every account holder (person, corporation or other entity) and for every other person (up to three, in the case of a business account) who is authorized to give instructions in respect of the account.

For a person, the record must include their name, address, date of birth, and their occupation, or in the case of a sole proprietor, the nature of their principal business.Footnote 19

For an account holder that is a corporation or an entity other than a corporation, the record must include its name, address and the nature of its principal business.Footnote 20

For a corporation, you must also keep a copy of the part of its official corporate records that contains any provision relating to the power to bind the corporation regarding the account.Footnote 21 This could be found in, for example:

  • the articles of incorporation; or
  • the bylaws of the corporation that set out the officers duly authorized to sign on behalf of the corporation, such as the president, treasurer, vice-president, comptroller, etc.

Retention: At least five years from the date the record was created. However, if this information is kept in one of the other account records, then the retention of that other record applies – at least five years from the date the account is closed.Footnote 22

Signature cards

You must keep a signature card for every person authorized to give instructions on an account you open.Footnote 23 It can include the person's handwritten signature or an electronic signature that was created or adopted by the person.

An electronic signature can be numeric, character-based, or biometric, so long as it is unique to the person and a record can be kept. An electronic signature may also be encrypted. For example, a client's personal identification number (PIN) can be used as an electronic signature. FINTRAC's expectation is that it will be possible to review a signature card record during an examination, but the electronic signature does not need to be unencrypted.

You can keep a single signature card for a person that holds multiple accounts. You do not need to create a new signature card every time they open a subsequent account.

Retention: At least five years from the date the account was closed.Footnote 24

Intended use of an account record

You must keep a record of the intended use of an account.Footnote 25

Examples of the intended use of an account includes, but is not limited to:

  • investments for the eventual payment of a child's education;
  • investments for personal savings, long term savings or retirement;
  • investments of the retained earnings of a corporation; or
  • investments for a group plan.

Retention: At least five years from the date the account was closed.Footnote 26

Other account records

You must also keep the following records for every account you open:Footnote 27

  • every application in respect of the account;
  • every account operating agreement that you create or receive in respect of the account;
  • every confirmation of purchase or sale;
  • every guarantee;
  • every trade authorization;
  • every power of attorney and joint account agreement;
  • all correspondence (for example, emails), about the operation of the account; and
  • a copy of every account statement that you send to an account holder.

Retention: You must keep account applications and account operating agreements for at least five years from the date the account was closed.Footnote 28 You must keep all the other listed records for at least five years from the date they were created.Footnote 29

2. What are my responsibilities when maintaining records?

In order to comply with your record keeping requirements, you must keep records in such a manner that they can be provided to FINTRAC within 30 days of a request.Footnote 30 The 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.Footnote 31

Employees who keep records for you are not required to keep them after their employment ends. The same is true for persons in a contractual relationship with you, when the contractual relationship ends.Footnote 32 You have to obtain and keep the records that were kept for you by any employee or contractor before the end of the person's employment or contract.

There may be situations where you are required to keep records for purposes other than complying with your obligations 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.

3. What are the exceptions to the record keeping requirements?

If you are required to keep a record with information that is readily available in other records, you do not have to record the information again.Footnote 33

For example, when you keep a copy of a large cash transaction report (LCTR) you may choose to use this as your large cash transaction record for the same transaction, so long as all of the information that would otherwise be kept in the large cash transaction record is captured within the report. Any requirement related to keeping the large cash transaction record would still apply, such as verifying identity.

Financial entities, public bodies, and very large corporations or trusts

You do not have to keep a large cash transaction record or a large VC transaction record if the cash or VC is received from a client that is a financial entity (FE) or a public body, or from a person who is acting on behalf of a client that is an FE or public body.Footnote 34

You do not have to keep the account records, as listed above, when you open an account for:Footnote 35

  • a public body;
  • a very large corporation or trust; or
  • a subsidiary of those entities, if the financial statements of the subsidiary are consolidated with those of the public body, very large corporation or trust.

Virtual currency

When you receive VC as compensation for the validation of a transaction that is recorded in a distributed ledger or you receive a nominal amount of VC for the sole purpose of validating a transaction or a transfer of information, you do not need to keep a large VC transaction record. Footnote 36

Other record keeping exempted activities

You do not have to keep the account records identified in this guidance for the following:Footnote 37

  • the sale of a registered annuity policy or a registered retirement income fund;
  • the opening of an account for the deposit and sale of shares from a corporate demutualization or the privatization of a Crown corporation;
  • the opening of an account in the name of an affiliate of an FE, if that affiliate carries out activities that are similar to those of persons and entities referred to in paragraphs 5(a) to (g) of the PCMLTFA;
  • the opening of a registered plan account, including a locked-in retirement plan account, a registered retirement savings plan account and a group registered retirement savings plan account;
  • the opening of an account established pursuant to the escrow requirements of a Canadian securities regulator or Canadian stock exchange or provincial legislation;
  • the opening of an account where the account holder or settlor is a pension fund that is regulated by or under federal or provincial legislation;
  • the opening of an account in the name of, or in respect of which instructions are authorized to be given by an FE, a securities dealer or a life insurance company, or by an investment fund that is regulated under provincial securities legislation; or
  • an account opened solely to provide customer accounting services to a securities dealer.

Group Plans

If you open a group plan account (other than those for which exceptions already apply) you do not have to keep a signature card for a person who is a member of the group plan if:

  • the identity of the entity that is the plan sponsor has been verified; and
  • the individual member contributions are made by the sponsor of the plan or by payroll deductions.Footnote 38
Date Modified: