Record keeping requirements for money services businesses
This guidance on record keeping is applicable to money services businesses 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 explained 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 money services business, 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:
- Methods to identify individuals and confirm the existence of entities
- Business relationship requirements
- Ongoing monitoring requirements
- Beneficial ownership requirements
- Third party determination requirements
- Politically exposed persons and heads of international organizations – Money services businesses
As a money services business, you must keep the following records:
- Suspicious transaction report records
- Large cash transaction records
- Records for transactions of $3,000 or more
- If you receive $3,000 or more for the issuance of traveller's cheques, money orders or other similar negotiable instruments
- If you cash $3,000 or more in money orders
- Records of remitting or transmitting funds of $1,000 or more
- Foreign currency exchange records
- Internal memorandum received or created in the normal course of business
- Records about ongoing service agreements
- 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 your 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 purchase a money order, 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 of account;
- the full name of the account holder; and
- the currency in which the account's transactions are conducted.
Retention: You must keep large cash transaction records for at least five years from the date the record was created.
3. Records for transactions of $3,000 or more
a. When you receive $3,000 or more for the issuance of traveller's cheques, money orders or other similar negotiable instruments from an individual or entity, you must record:
- the date it was received;
- the amount received and whether the amount was received in cash, cheques, traveller’s cheques, money orders or other similar negotiable instruments; and
- the name, address and date of birth of the individual who gave you the funds.
b. When money orders of $3,000 or more are cashed, you must record:
- the name, address and date of birth of the individual cashing the money order(s); and
- the name of the issuer of each money order.
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 remitting or transmitting funds of $1,000 or more
When you remit or transmit $1,000 or more, whether internationally or domestically, you must record:
- if the client is an individual, their name, address, date of birth, telephone number and the nature of their principal business or their occupation;
- if the client is an entity, the name, address, date of birth, and telephone number of the individual who requested the transaction on behalf of the entity and the nature of that individual’s principal business or their occupation;
- the reference number of the transaction;
- the date of the transaction;
- the name of the beneficiary of the transaction; and
- the amount and currency of the transaction.
If you transmit funds as an EFT of 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 a record for the remittance or transmission of $1,000 or more for at least five years from the date the record was created.
5. Foreign currency exchange records
You must keep a transaction ticket for every foreign currency exchange transaction you conduct, regardless of the amount. Each ticket must include:
- the date, amount, and currency of the purchase or sale;
- the method, amount, and currency of the payment made or received; and
- if the transaction was of $3,000 or more, the name, address and date of birth of the individual who carried out the transaction.
Retention: You must keep foreign currency exchange records for at least five years from the date they are created.
6. Internal memorandum received or created in the normal course of business
You must keep a record of every internal memorandum (i.e. any memo, note, message or similar communication) that you create or receive in the normal course of business regarding services you provide to clients.
Retention: You must keep internal memoranda records for at least five years from the date they are created.
7. Records for ongoing service agreements
You have to keep certain records when you enter into either of the following agreements:
- an ongoing electronic funds transfer, funds remittance or foreign exchange service agreement with an entity; or
- a service agreement for the issuance or redemption of money orders, traveller's cheques or other negotiable instruments with an entity.
In either of these cases, you have to keep the following records:
- a record of the name, address, date of birth and occupation of every individual who signed the agreement on behalf of the entity;
- a list containing the name, address, and date of birth of every employee authorized to order transactions under the agreement;
- a client information record about the entity, which includes the entity’s name, address and the nature of the entity’s principal business; and
- if the client information record is about an entity that is a corporation you must keep a copy of the part of the official corporate records that contains any provision relating to the power to bind the corporation regarding transactions with you, if this is obtained in the normal course of business.
- This could include a certificate of incumbency, 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. If there were changes subsequent to the articles or bylaws that relate to the power to bind the corporation regarding the transactions and these changes were applicable at the time the client information record was created, then the board resolution stating the change would be included in this type of record.
Retention: You must keep these records, other than client information records, for five years from the day the last business transaction was conducted. Client information records must be kept for five years from the day they were created.
8. 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 the question – 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 a large cash transaction record if the cash is received from a financial entity or a public body.
If you receive $3,000 or more from a financial entity or public body for the issuance of traveller’s cheques, money orders or other similar negotiable instruments, you do not have to keep a record of the transaction.
- Date Modified: