The Financial Transactions and Reports Centre of Canada (FINTRAC) has eased compliance obligations for firms when it comes to collecting beneficial ownership information.
Canada’s anti-money laundering (AML) watchdog issued revised guidance on Monday, which sets out the agency’s new approach to the obligation for financial firms (and other companies that are subject to AML legislation) to verify beneficial ownership information under know-your-client regulations.
Previous FINTRAC guidance required that only “official documentation could be relied upon to confirm the accuracy” of information obtained from customers about beneficial ownership, today’s FINTRAC guidance states.
According to the updated guidance, FINTRAC’s position is that, “once the beneficial ownership information is obtained, various reasonable measures may now be used to confirm [its] accuracy … ”
Among other things, financial firms, securities dealers, life insurers, and money services businesses have certain obligations regarding beneficial ownership information when they have to confirm the existence of an entity, such as a corporation or a trust, including obligations to: document the ownership, control and structure of the entity; and identify beneficial owners and directors.
These changes have been in effect since May 1.