Under Canada's New Proceeds of Crime (Money Laundering) and Terrorist Financing Regulations, all Financial Institutions including banks, Trust Companies, Credit Unions and similar entities such as Life insurance companies, securities dealers or anybody who acts as a Deposit Broker or Agent/sub-agent is required to gather a higher level of personal information from clients or customers.

What will this mean to you.

Unfortunately not all Financial institutions are demanding the same information from clients. Institutions are at present applying different interpretations of the regulation. Purveyors of independent financial services could be asking for more information than required for the product. But in most cases you will find that:

All applications for Savings/chequing type accounts, Term Deposits, Guaranteed Investment Certificate purchase's and alike require your Social Insurance Number (SIN) and from this point on, need to be accompanied by another piece of identification, such as drivers license, passport, birth date and/or birth certificate etc. Refusal will negate the proposed transaction, while incomplete information could cause delays or rejection.

At least one institution, within its list of mandatory requirements are asking for two other pieces of I.D. and your SIN. Included in its acceptable list is a Credit Card. Along with the above, your occupation is now to be recorded. So if you're not a butcher, baker or candle stick maker you could say you're a "student", "housewife", "unemployed" or "retired". For a minor without a SIN; a Birth Certificate, Health Card or passport is required, in some cases a library card is being accepted. Non-Residents are required to produce Social Security number, Birth Certificate and or Passport. Joint and multiple applicants are now required to provide personal identification on each registered owner, as if it where a single account being opened.

Non-profit organizations and corporations may be required to complete a special informational form, provide partnership agreement's and/or articles of association or incorporation. Excerpts from organizational or corporate records showing who has signing authority and date of birth.

Financial Institutions (Officers/Directors), employees and/or contractors who's firms are deemed to be non-compliant can be, if convicted, sentenced to 5 years in jail and/or made to pay up to $2,000,000. in fines.

I suggest reading FINTRAC's mandate to get a grasp of how wide their power to investigate goes.

Some concerns we have with these new requirements are that all of your important identification, will now be on file at several different institutions. On the other hand, if your financial advisor is providing Deposit Brokerage services - is s/he a sub-agent of a non-FCIDB member deposit brokerage office or totally independent of any regulation body?. How secure will this data be? With the proliferation of identity theft what is your guaranty that your privacy rights will be protected at every level?

We feel that you should only have to prove your identity to the institution where you do your day to day banking. The bank has the resources and the security measures to protect your vital data. When you purchase an investment at an institution other than your own, that institution should be able to rely on the authentication of your identity determined by your regular bank by accepting a personalized cheque on your account. Cash, bank drafts/money orders transactions would not be permitted.

Investments made in joint names or in the name of another person should only require that verification of the person making the investment as they are the source of the money (after all we are trying to discourage money laundering and terrorist financing so verifying the source is critical). Money laundering and terrorist financing should by logic require liquid access to any funds deposited. GICs lock in the funds for the term of the investment and hardly meet this requirement.

Many individuals make investments in joint names for estate planning purposes or for children or grandchildren and these new requirements will make identification requirements burdensome in these situations.

Determined and well financed criminals (money launderers and terrorists certainly fall into this group) will be able to provide forged passports or other photo identification thus providing a false sense of security.

Does the purpose of these new regulations justify compromising the individual security of honest citizens. Your comments and concerns on this matter would be welcome.

To learn more about a FCIDB Deposit Broker, try the following links:

	Products & Services: What is a deposit broker?
	Money Management Made Easy

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