FINTRAC published new guidance related to politically exposed persons (“PEP”) and heads of international organizations (“HIO”), family members and close associates that comes into effect June 1, 2021.
The AML Shop Advisor Marcelle Dadoun has performed a comparison of the current FINTRAC regulations versus the new regulations coming June 2021. Click the button below to read the full analysis.
PODCAST VIDEO: Canadian Blockchain Consortium Podcast featuring Matt McGuire
On February 15th, Matt McGuire, The AML Shop Practice leader appeared as a guest on the Canadian Blockchain Consortium’s podcast to give his unique insights on the regulatory challenges facing cryptocurrencies in Canada, how digital asset businesses can optimize their compliance, and what the growing adoption of Bitcoin by major corporations means for the industry.
About the podcast:
This engaging discussion on regulatory matters and compliance for crypto currencies and digital asset businesses is a must view for any company looking to increase their awareness of current topics and challenges in this space. Watch the entire podcast below (via the Canadian Blockchain Consortium).
WATCH VIDEO: Canadian Blockchain Consortium Webinar Discussion Featuring Matt McGuire
Matt McGuire, Practice Director, from The AML Shop recently participated in a Webinar that discussed Sanctions, US law and the impacts on crypto business. Watch the video recording below from the Canadian Blockchain Consortium.
About the Webinar:
With the rapid adoption of cryptocurrencies like Bitcoin, compliance is taking centre stage - and many custodians and digital asset platforms are falling short. In particular, failure to comply with Know-Your-Client regulations and investment restrictions applied by the United States government can have a massive impact and result in major fines for digital asset companies. Discover in this insightful Canadian Blockchain Consortium seminar ways that the laws enforced by the Office of Foreign Assets Control impact digital currency investment and restrict client jurisdictions and strategies for keeping aware and compliant.
WATCH VIDEO: iComply Fireside Chat Panel Discussion Featuring Gene DiMira
Eugenio (Gene) DiMira CAMS-Audit, CGSS from The AML Shop recently participated in a panel discussing financial crime in the context of mergers and acquisitions. Watch the video recording below. Thanks to iComply Investor Services.
Matthew McGuire, Co-Founder of The AML Shop, is bestowed highest honour of Fellow designation by the Chartered Professional Accountants of Ontario (CPA).
Each year, the Chartered Professional Accountants of Ontario bestow its absolute highest honour on what makes up only 1% of its total profession in the province; a Fellow of the Institute of Chartered Accountants.
The AML Shop’s very own Co-Founder and Practice Leader, Matthew McGuire is one of this year’s recipients and was honoured at the Fellows Evening of Distinction virtual event on December 3, hosted by Peter Mansbridge.
Fellows are nominated by their peers and industry leaders which hold such merit and integrity. The criteria that the nominating and judging committees look for are beyond exemplary such as the commitment to a Fellow’s present impact on their profession as well as their genuine desire to pay it forward with the intention to keep the CPA industry strong and diverse.
The distinction of Fellow formally recognizes CPAs who have rendered exceptional service to the profession and in their communities. They exemplify the breadth and depth of the profession and pave pathways for the next generation of CPAs. It is the highest honour conferred by the profession.
Congratulations Matt!
UPDATED: The Travel Rule and Virtual Currency: No Quarantine Required - A Complimentary Webinar Recording
We are moving our December 1st live webinar to a recorded version that will be shared with anyone who requests it. We've made this change because the Annual Canadian Money Services Businesses Association Conference has moved to the same time, featuring two of our AML Shop experts as panelists on a similar topic.
Please email Shamela Styles, our Director of First Impressions, shamela@theamlshop.ca. She will ensure you are on the list to receive the recording when it is available after December 1st. Here are the details about The Travel Rule and Virtual Currency: No Quarantine Required:
When we hear anything involving the word travel these days, we either long for a sunny beach or wish that quarantine hadn’t become a part of our daily vocabulary.
The AML Shop is switching it up and talking travel...AML style! If you’re a dealer in virtual currency or have an interest in this space, you’ll want a copy of our webinar recording to learn about the intent and impact of the travel rule as it relates to AML regulations.
We’ve assembled an expert panel that will engage attendees in topics such as:
The travel rule in general;
Some of the challenges associated with complying with the travel rule;
The impact regulations have had on the virtual currency space;
The future of virtual currency regulations.
We would love to hear from you! As it pertains to this webinar about the travel rule, what are your questions or ideas that you'd like our panelists to cover? We'll review all of your feedback and include it where we can, perhaps even in a follow-up webinar! Email Shamela to request the recording or to submit your ideas.
Top 12 Questions for Credit Union Directors to ask their Chief Anti-Money Laundering Officer
The AML Shop has created a rigorous document to help guide credit union leadership in meeting and exceeding its AML program with the expertise of its CAMLO. With so many changes and evolving industries and sectors coming to credit unions for financial guidance and services, applying these questions and having open discussions around them will set your AML compliance team up for success.
What are the key vulnerabilities of the credit union to money laundering, based on: its region; what we have observed in our own monitoring and reporting; what we have learned from our peers; and what we have read in authoritative publications?
Which member types and products and services pose the greatest money laundering risk to the credit union? Do we, for instance, deal with clients in these sectors (how can we be certain we don’t), and how do we control the risk of their activities? Are any of these activities beyond our risk tolerance?
a) Alternative financial services providers – principals and agents (money services businesses, cheque cashing, payday lenders, foreign exchange dealers, cryptocurrency companies, prepaid card players, ATMs)b) Cash-intensive businesses
c) Cannabis related businesses
d) Firms or lawyers, accountants, or corporate service providers
e) Gaming related businesses
f) Dealers in high-value goods
g) Adult services and goodsWhat are the controls we lean on the most to limit our vulnerabilities, how are they tested, and what have the results been of the most recent tests?
Does the CAMLO have sufficient training, resources and access to ensure their role is performed effectively, even during their absences, and considering existing issues log and changes to standards? Are they willing to so certify?
Have there been any material changes in regulatory reporting trends (large cash transaction reports, electronic funds transfer reports, suspicious transaction reports), in terms of volume, dollar value, and timeliness? What explains those variations?
a) What was the nature of the activity disclosed in suspicious transaction reports?
How have we ensured that technology that we use to risk rate clients, monitor their transactions, and file regulatory reports are configured properly to address salient risks, and operate effectively?
How have we ensured that third parties have acted in accordance with our standards, including, for instance, agents and service providers.
What were the nature of, and how have we dealt with sensitive AML situations?
a) Requests from law enforcement or revenue agencies?b) Repeated suspicious transaction reports involving one member?
c) Demarketing of clients?
d) Employees who have not completed their training, or have repeatedly failed to apply policies and procedures?
What have been the outcomes of interactions with prudential regulators and FINTRAC regarding anti-money laundering compliance, including results of examinations, policy interpretations and voluntary disclosures?
What are the qualifications of the individual conducting the compliance effectiveness review, what as the scope and methodology of their review, have their findings been challenged/contradicted by regulators in their prior examinations of the credit union?
What evidence do we have that material findings from prior self-assessments, compliance effectiveness reviews, and regulatory examinations are being addressed?
What changes in the legislation or guidance around anti-money laundering will cause a material impact to our credit union?
For more information, please connect with us directly, and also click on the following button to view a PDF version of these 12 rules.
The AML Shop welcomes Gene DiMira as its new Chief Identity Officer
FOR IMMEDIATE RELEASE - Toronto, ON - The AML Shop, Canada’s top Anti-Money Laundering firm, announces the appointment of Eugenio (Gene) DiMira, CAMS-Audit, CGSS as Chief Identity Officer.
Gene DiMira is an internationally recognized anti-money laundering expert and an industry innovator in digital identity. He spent the last decade as the Head of Global Compliance Anti-Money Laundering/Counter-Terrorist Financing programs at Manulife.
Financial services evolution has driven legacy financial services providers and fintechs alike to seek digital, automated and intelligent approaches to fighting financial crime while managing compliance obligations. In Gene, The AML Shop found a thought leader and practical guide to help its clients to navigate this new landscape.
Monika Cywinska, Co-Founder and Chief Operating Officer at The AML Shop says, “We are excited to have Gene, one of the experts at the forefront of compliance and financial crime risk management, join our team. The market is demanding a frictionless online experience, whether it’s getting a mortgage, buying insurance, or sending money abroad. At the same time, regulators are expecting more confidence about Know Your Customer (KYC) as a meaningful baseline to risk monitoring, and the preservation of privacy. Gene and our team can help financial services and regulatory technology companies meet those challenges with intelligent approaches and proven tools.”
Gene shares, “My thought process begins with ‘digital first’, meaning that a new way of thinking is required to how we collect, trust and manage information for faster, reliable and effective delivery of services. If we create our work as future ready, then we stay agile to adapt as the current pace of technology requires.” I look forward to bringing this philosophy to The AML Shop and creating a balanced hub where digital ID and AML initiatives lead the evolution.”
Gene has contributed to the authorship of domestic and Financial Action Task Force standards, spoken extensively on the subject, designed and conducted extensive surveys of international digital identity providers, and selected and implemented those tools.
Gene will continue his advocacy and policy development through The AML Shop with organizations such as the Digital ID and Authentication Council of Canada (DIACC) where he serves as Co-Chair of the Outreach Expert Committee, helping to bring digital-first methods to the Canadian Market in a manner that informs and reduces risk.
Gene’s addition to The AML Shop is a natural alignment of the international strengths and expertise that both he and the company have built over decades of experience. The AML Shop’s strategies and team of veteran advisors are what make it the leading source for anti-money laundering compliance and digital identity expertise in Canada. experience.
For more information:
Matthew McGuire, Practice Leader matt@theamlshop.ca
About The AML Shop
Our team of veteran compliance advisors share our goals to help clients manage their risks, maximize their opportunities and achieve and maintain compliance. We provide: expert advice; support with regulatory exams; development and reviews of financial crime compliance and risk management programs; assistance with the validation of AML technology; and the management or staffing of your compliance functions and compliance teams. We serve clients across Canada in every regulated sector and in emerging industries with a specialty in FinTech and Cryptocurrency.
Beneficial Ownership Presentation With a Twist: A Vendor Showcase
If you’re a fan of our webinar series, you know that we love to keep our guests hopping with the most up-to-date content and subject matter experts (sprinkled with a little fun of course, too).
Beneficial ownership is a hot topic everywhere right now and we thought that instead of sharing the facts and features of how it’s working (or not working), why not invite the product experts in to showcase their solutions that can make a real difference in your operations?
Join our presentation with industry leaders in the know your business (KYB) space who offer solutions that can help reporting entities meet their regulatory obligations to obtain and verify the information about the beneficial owners of their entity clients.
When? October 27, 2020 at Noon, EST.
Your takeaway from this vendor showcase will be a better understanding of the regulatory technology (RegTech) options that are available to assist with compliance with beneficial ownership requirements.
In addition to financial entities, life insurance companies, brokers and agents, MSBs and securities dealers, already have obligations to obtain and verify information about the beneficial owners of entity clients. As of June 2021, these obligations will also apply to a variety of other reporting entities, including accountants and accounting firms, casinos, dealers in precious metals and stones and real estate brokers, developers and sales reps.
This webinar will exhibit real solutions that aim to help comply with these obligations while minimizing customer friction - and who doesn’t want to achieve that at a time when beneficial ownership is under the microscope?
Register now as our seats fill quickly and we look forward to seeing you on October 27th.
Fall webinar series: An inside view on AML and law enforcement: How the RCMP is driving change within our industry
Have you ever wondered what happens in the AML process after you submit a Suspicious Transaction Report (STR), or turn things over to local law enforcement?
Join our webinar on Thursday September 17, 2020 from Noon to 1:15pm EST for the most valuable and interesting conversations with RCMP veterans’ first-hand knowledge of how law enforcement is working towards better supporting the AML industry.
As AML professionals, we have a significant and evolving role in the investigation of money laundering offences in Canada. We do our best at monitoring and reporting one side of the AML equation. Law enforcement, specifically the RCMP, has a huge role to play when it comes to investigating and prosecuting money laundering criminals.
Meet Corporal Steve Harten with the Toronto North division of the RCMP. He’s spent many years in the drug squad and now spends his time fighting financial crime which has direct ties to the money laundering efforts of the RCMP.
Cpl. Harten will be our special guest panelist where he will present two money laundering cases that will demonstrate how money is laundered and generated under the organized crime umbrella. He will candidly share his experiences based on his time investigating drug crimes and now, money laundering enforcement.
Cpl. Harten was a key player in Canada’s first successful federal seizure and forfeiture of Bitcoin and will share his knowledge on how the RCMP’s foundation for success affects and protects our industry.
This candid conversation with Cpl. Harten will also include one of the top veteran experts of the AML industry, Garry Clement, former National Director, RCMP Proceeds of Crime Project, and current Adjunct Advisor at The AML Shop. This dynamic duo of AML super-powers will ensure that this 75-minute webinar is the most valuable content you’ll see all year.
You’ll walk away with a better understanding of:
The evolution of the RCMP’s financial crime strategy and its challenges. This will cover the mandate of the RCMP’s money laundering program and how it has changed in light of COVID.
Current trends in AML and trends in current investigative strategies.
Cryptocurrency initiatives and how the RCMP is ramping up its efforts to coordinate with dealers in virtual currency and to investigate crypto-laundering.
See you on Thursday September 17, 2020, at Noon EST. To register, please click here. As this is a complimentary webinar, feel free to share this with your colleagues.
FINTRAC is ready to resume desk reviews. We've got you covered.
After so much uncertainty with the COVID-19 interruptions, are you wondering about when or if a review will happen? While these have taken a back burner, last week it was announced that FINTRAC would in fact be resuming these exams.
https://www.fintrac-canafe.gc.ca/covid19/covid-2020-07-27-eng
As you read about FINTRAC’s plans, be sure to check out how The AML Shop is helping to guide clients through each stage of a review. We are with you every step of the way to ensure you are set up for success.
Check out this useful link to our website where you can learn all about how we are serving our clients during COVID:
https://www.theamlshop.ca/aml-and-sanctions-assessments-reviews-and-examination-support
The RCMP is making calls to cryptocurrency companies this week. Here's what you need to know.
Happy summer from The AML Shop everyone! We hope that you’re staying cool during this heatwave.
Our team loves connecting with our clients to stay in-the-know with what’s happening in their world and as one of the many ways we remain informed. This week, our cryptocurrency clients told us they received an email from an RCMP officer requesting contact information about their business.
If you receive a similar email, don’t panic. This request is not specifically targeted at your business.
Our team was proactive and contacted the RCMP directly for details. Cpl. Steve Harten shared that he was asked to compile a contact list for each virtual currency business that is currently registered with FINTRAC. The purpose of the list is for law enforcement to have a point of contact should they need to obtain more information or issue a production order.
Garry Clement, our Adjunct Advisor who had an esteemed career with the RCMP, including its Integrated Proceeds of Crime program says, “If you receive an email similar to what we have described, it’s always good to provide the information requested, as it demonstrates a commitment to compliance and it always pays to have good relations with law enforcement.”
With that being said, The AML Shop confirmed with Cpl. Harten that providing this information is completely voluntary, so you are under no obligation to provide the requested contact details if you don’t feel comfortable doing so. Clement also shares that, “cooperating with law enforcement shows good corporate citizenship which is such an important piece of every business’s fabric these days.”
Cpl. Harten has provided his contact details. If you would like more information on the virtual currency contact list, or require law enforcement assistance or perspective on an issue relating to virtual currency, you can contact Cpl. Harten directly, via email at steve.harten@rcmp-grc.gc.
As always, whenever you receive or hear about something you’re unsure of, call your AML support team or colleagues. You are always welcome to call the AML Shop, as it’s usually a good place to start.
Stay cool and watch our website for more news and updates like this. If you have an idea or question that you’d like us to answer, we’d love to hear it! Email us at: shamela@theamlshop.ca
Why a Director of First Impressions is any company’s first step to building trust. By Matt McGuire
They say that humans need less than two seconds to form a first impression. I’d imagine that’s even less nowadays when our minds are bombarded for competing attention and headspace.
If people are going to form their own opinion and perspective without much information and, in such an unreasonable time frame, why would a company dedicate resources to a position titled, Director of First Impressions?
Here at The AML Shop, let us start by telling you about Shamela Styles. Shamela is the first person that our clients, potential clients, partners, media and you, may connect with when you contact us in whichever channel you choose. We believe that fundamentally, humans enjoy other humans. If our current world situation hasn’t heightened our need for connectivity, it certainly has made us all more aware that we are pretty similar and just want what’s best for ourselves, our families, our community and our earth. So how does a simple job title share a story with grand beliefs and hopes for the greater good?
Because a Director of First Impressions boils down to one elusive value that companies spend millions of dollars on each year trying to attain: trust. When you speak or work with Shamela, you can tell, in under two seconds, that you’re speaking with a highly competent professional who is both chameleon and unicorn. She can adapt to any situation, be tasked with something completely out of her wheelhouse, and knock it out of the park. She has a heart so magnetic, you’ll find yourself looking for reasons to continue building trust and a relationship with her and by extension, our entire company.
Trust is built over time, of course, but you never get a second chance to make a good first impression, so they used to say.
Shamela is our brand champion. Knowing our business from the outside-in, understanding our clients’ and industry’s unique nuances, as well as the very complex systems of AML regulations. She welcomes every chance to make a first impression in all aspects of her role. People notice this. People feel her kindness and loyalty to her work and in turn, to them.
A Director of First Impressions is front and centre. Companies who survive now need to make bold moves and shift the way they align their most valuable people into the roles they were born to play. The AML Shop is built on a passion for excellence and expertise in every aspect of our work. Creative, meaningful roles that still have a long list of duties and responsibilities, are moving beyond the typical templated HR turn and burn mentality. People will always remember that first call, first message or first meeting where it felt like someone was waiting for your arrival and made you feel so special, you let down your guard, forgot about any agenda and realized, this place is different. They are listening to me. She is listening to me. She remembered my travel nightmare last trip and asked if the airline found my son’s note that he slipped into my purse. I can trust this place, this person whom I’ve never met until today, yet feels like we’ll become fast friends because I can trust what she is saying. I believe what she says because I see what she does.
And all of this from our fabulous, irreplaceable Shamela, who is empowered with everything at her disposal that lets her know she is valued, she is essential and she is a trusted lead on our team.
Don’t you wish everyone you had to call or email today was a Director of First Impressions? I guarantee your attitude, outlook and the overall day would be met with enough warmth and confidence to ask Shamela, where do I sign?
Remote work is not a barrier to a great review. Clients report it's the perfect time to evaluate your AML program and retool while client-facing activities have abated.
FINTRAC’s statements about AML during Covid stress that the compliance show must go on… and with good reason. Criminals are clearly taking advantage of perceived vulnerability to perpetrate pandamic-related fraud and related money laundering. STRs are first priority, towards FINTRAC’s unrelenting focus on compliance for intelligence.
While FINTRAC exams are currently suspended, FINTRAC’s expectations for compliance effectiveness reviews have not changed. A well planned and executed review not only prevents surprises for future examinations, but it also assists in preparation for known changes to legislation and guidance.
Remote work is not a barrier to a great review – and it might be the perfect time for you to evaluate your AML program and retool while client-facing activities have abated.
The AML Shop is well-practiced at conducting its procedures for a review from a distance – in much the same manner as FINTRAC conducts its desk reviews. We apply our insights from participation in dozens of FINTRAC examinations, from their guidance and examination manual, from the practices of your peers, and from international standards. Following their lead, our procedures are focused on risk and ongoing monitoring, with detailed and deep analytics for high-risk clients and transactions to test effectiveness.
In almost all instances, our review begins with an in-depth interview with the Chief Anti-Money Laundering Officer and a detailed information request. We exchange documents using secure services with Canadian-only storage with guaranteed privacy. Records-review can be conducted with read-only auditor access to the back-office and transaction monitoring, or through extracts. And our interviews can be planned around the schedules of your team, service providers, and agents.
Most reviews can be conducted in four to six weeks. We have many clients taking advantage of this unique time we find ourselves in. There’s still plenty to do to remain fully compliant yet many businesses don’t have the resources to conduct these reviews themselves. We’re your AML partners every step of the way. Starting with a compliance effectiveness review is a great way to meet you and your team and learn about your business while ensuring you are fully compliant. Contact Matt McGuire at matt@theamlshop.ca.
The AML Shop’s outsourcing services are a lifeline to clients that are challenged by the expectation that it’s ‘business as usual’
The AML Shop’s outsourcing practice is alleviating the worries and workload of AML professionals in light of FINTRAC’s announcement that there is no excuse for not meeting compliance regulations during COVID-19. They’ve made it clear that it’s business as usual. We say it’s anything but.
Some outsourced clients have already reached out for additional support because they are either short-staffed or find themselves needing a hand in meeting their AML compliance duties. The AML Shop realized that there could be more businesses out there needing this exact type of help.
Coupled with the news that The AML Shop is seeing a massive increase in COVID-19 related fraud, it has created the perfect storm of a major workload increase and not enough staff or expertise to get it all done.
It’s unfortunate that people are profiting through crime during a time of such uncertainty, while taking advantage of people’s vulnerabilities and trust. Fraudsters sense that the spotlight is shining on other issues so as the saying goes, while the cat’s away the mice will play.
Matt McGuire recently participated in a podcast series called Captivated Audience, which is so timely and enlightening on how COVID-19 is affecting AML businesses in Canada. You can listen to the 13-minute recording by clicking the link here.
Matt shares his ideas on FINTRAC’s recent position and offers great tips on how to think beyond today in terms of what financial crime professionals should be planning for when this settles down. Here’s a hint: plan on asking for a bigger budget and overhaul your own compliance programs so you are ultra-prepared next time or as COVID-19 continues to affect our business for years, as some are predicting.
He also suggests ways to have staff optimizing their time working from home such as online classes. And a big silver lining: some people are saving anywhere from two to five hours per day in commuting time which offers a better life balance and maximizes work output in a more efficient way. You will love this candid, funny and valuable podcast!
Matt says, “We only want the very best for our clients and their colleagues. Know that we are ready to help you with our established outsourced practice dedicated to remotely supporting compliance teams”. The AML Shop provides outsourced support to companies across the country including credit unions, money service businesses and payments service providers, securities dealers and fintechs. If you find yourself treading in deep waters, or want to have a backup plan, (or business continuity plan), in place should things change in your organization, we’re happy to help.
Reach out and we’ll work together to meet your specific and likely, changing needs in a time where little is certain. Please email: info@theamlshop.ca or call us at 1-877-701-0555.
About The AML Shop
Our team of veteran compliance advisors share our goals to help clients manage their risks, maximize their opportunities and achieve and maintain compliance. We provide: expert advice; support with regulatory exams; development and reviews of financial crime compliance and risk management programs; assistance with the validation of AML technology; and the management or staffing of your compliance functions and compliance teams. We serve clients across Canada in every regulated sector and in emerging industries with a specialty in FinTech and Cryptocurrency.
Update to this week's FINTRAC announcement around reporting requirements
Further to their initial announcement earlier this week, in light of COVID-19 FINTRAC still expects reporting entities to meet all of their obligations, including in relation to reporting. On the bright side, FINTRAC states that for the time being, they will not be contacting reporting entities to initiate new examinations.
If your team needs help with meeting these requirements, we are here to help. We are working with clients on a temporary basis as we navigate the uncharted waters of COVID-19. We can become an extension of your team, providing the extra resources needed to continue business continuity especially for reporting and all things AML compliance-related.
Please contact us via email or telephone if you’d like to discuss ways to work together: matt@theamlshop.ca or 1-877-701-0555 ext. 101.
Message to all reporting entities in light of COVID-19 from the Department of Financial Transactions and Reports Analysis of Canada
Due to the recent outbreak of COVID-19, FINTRAC understands that businesses (i.e., reporting entities), subject to obligations under the Proceeds of Crime (Money Laundering) and Terrorist Financing Act (PCMLTFA) and associated regulations, may face challenges in meeting their obligations in situations where staff may be reduced or unavailable to do their regular work.
We expect that reporting entities will do everything possible to meet all of their obligations, including in relation to reporting. However, we understand that some reporting entities may find themselves in a situation where they are unable to meet some of their obligations. In such a case, FINTRAC is asking that reporting entities document the reasons why and keep a record of it. Given the situation, FINTRAC will take a reasonable approach with its compliance activities.
When it comes to reporting, priority should be given to submitting suspicious transaction reports (STRs). In a situation where reporting entities may be in possession of critical information related to national security matters that should be normally submitted to FINTRAC but, for some reason, cannot be provided in a timely manner, we would ask that you send an email to emergencyreport-declarationurgente@fintrac-canafe.gc.ca, and someone will then contact you. A written report should follow as soon as possible.
Given the current high level of calls related to COVID-19 on the Government of Canada telephone lines, FINTRAC will no longer be offering telephone support for inquiries about the following: compliance obligations, reporting system access issues, and MSB registration obligations. For these matters or any other urgent inquiries, please contact your regional compliance officer or send an email to guidelines-lignesdirectrices@fintrac-canafe.gc.ca.
For technical assistance, please contact FINTRAC’s Tech Support team at the following email:
Note that depending on the volume of requests, you may experience a slower level of response.
Date Modified: 2020-03-19
Department of Finance and BOC's Proposed Legislation for PSPs: We Can Help
Recently, the Department of Finance and the Bank of Canada (BOC) presented details on proposed legislation related to retail payment service providers (PSPs). Key areas of this legislation include; operational risk, financial risk, market conduct risk, efficiency risk, money laundering and terrorist financing risk. While we don’t know the timing of its release, once legislation is passed, there will be guidelines to support it.
We can share a few things with you at this time. You will find below some of the highlights that we feel will have the biggest impact. If you’d like to review the DOF’s 2017 consultation paper , click and enjoy reading the full recommendations.
If you or your team have any questions about this, please connect with us. We work with PSPs regularly to ensure they meet all AML compliance regulations whether they are just starting their AML program or need The AML Shop’s expertise to refine certain areas. We’d love to hear from you.
Here are some of the key highlights that we thought were important to share:
The legislation will be based on functions; Finance was pretty clear that these were still proposed and not finalized: provision and maintenance of a payment account, payment initiation, authorization and transmission, holding of funds and clearing and settlement.
There are four principles that have been identified to guide the development of the oversight framework should be proportionate with the level of risk posed by a payment activity; oversight measures should not create a barrier to competition and innovation by unduly burdening PSPs.
There should be consistency of oversight, irrespective of the type of entity or the technology.
Oversight should be designed to maximize effectiveness with clear, accessible and easy to integrate requirements within different payment services.
If an entity is already under prudential oversight, there may be some exemptions under this new legislation.
If an entity is already under prudential oversight, there may be some exemptions under this new legislation.
The BOC will be the primary regulator of this legislation, once final, and will have three components to their mandate:
Registration: all PSPs will be required to register with the BOC. The registry will be public and the registration process has not been established yet.
Operational Risk Management: this will be a principles-based approach similar to that of larger systematically important systems (like Payments Canada).
PSPs will be required to provide reporting to the BOC on their operational risk management programs.
The BOC will provide guidance to PSPs on end-user funds safeguarding. PSPs will be required to report certain activities to the BOC based on the guidance. The BOC will have oversight responsibilities and may even perform examinations of the PSPs. Not all PSPs will be looked at equally; it will be a risk-based approach.
The BOC will also provide time for all PSPs to adjust to the new expectations, although there was no specific mention of how much time or any deadlines.
IIROC's Updated Guidelines Will Improve How to Attain a Reasonable Belief of Identity
IIROC has now published an update to their AML Guidance with an effective date of June 1st, 2020 to be in place. This is great news, as it will remove the need to collect clients’ citizenship, occupation and employment information and reduce the burden from collecting identification to attaining a “reasonable belief of identity” of these persons. For all the details, click here for the notice link from IIROC.
OSC Makes It Easier for Smaller Investment Firms to Outsource Compliance Role
The AML Shop is a one-stop-shop for AML compliance needs, serving clients all over North America. The feedback we often hear from smaller investment firms is that they aren’t ready to hire a full-time compliance officer, however it is a regulation that they must follow. That is, until this week’s announcement from the Ontario Securities Commission.
The OSC has removed such barriers, enabling smaller investment firms to choose to outsource its compliance role. This is good news for smaller firms that can improve resources and efficiencies in an outsourced partnership.
Here is a link to the full article. And if you’d like to discuss your outsourcing needs, get in touch with us by emailing info@theamlshop.ca.