Record keeping requirements for securities dealers


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 Transaction Reports

When you submit a Large Virtual Currency 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

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

c. Large virtual currency transaction records

You must keep a large virtual currency (VC) transaction 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

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:

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:

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

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

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

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:

Date Modified: