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Join Outlier’s David Vijan at the DIACC Executive Planery on November 6th, 2025.
The following topics will be explored during the panel discussion on “The Digital Trust Landscape: Open Banking & Client Identity Verification”:
Panel Details:
Effective October 1, 2025, Canadian anti-money laundering (AML) reporting entities regulated by the Financial Transactions and Reports Analysis Centre of Canada (FINTRAC) are required to report to Corporations Canada any material discrepancies identified between the beneficial ownership information that they have obtained and that is listed in Corporations Canada’s database.
This requirement was introduced to enhance the reliability of beneficial ownership information available to authorities and the public, and to reduce the opportunities for misuse of Canadian corporate structures in money laundering, tax evasion, and sanctions avoidance schemes. Since the usefulness of the beneficial ownership information depends on the accuracy of the information, amendments under the Proceeds of Crime (Money Laundering) and Terrorist Financing Act (PCMLTFA) now will require reporting entities to flag material discrepancies between the information provided by a corporation incorporated under the Canada Business Corporations Act (CBCA) and what is recorded in the registry, thereby supporting Corporations Canada in maintaining an accurate database.
A “material discrepancy” exists where beneficial ownership information collected by a reporting entity substantively contradicts what is publicly disclosed. While the regulations give limited guidance, missing beneficial owners are considered material, while minor typographical errors are not. Currently, the definition of “material” remains imprecise, which may create some uncertainty for compliance teams.
The requirement applies to reporting entities who have the existing obligation to take reasonable measures to confirm the accuracy of beneficial ownership information when they first obtain it and in the course of conducting ongoing monitoring of their business relationships.
Discrepancy reporting applies only to CBCA corporations that are active on the Corporations Canada registry.
Reporting entities are required to report a material discrepancy to Corporations Canada within 30 days after the day on which it is identified when the following criteria are met:
In these cases, reporting entities must check the Corporations Canada registry when a high-risk relationship is first identified and continue to check during ongoing monitoring of that high-risk business relationship.
If a previously reported discrepancy is identified again (i.e., during the course of ongoing monitoring) and it has not been resolved, it must be reported again. If there are other issues related to corporate status or registry info (not beneficial ownership information), this information can still be reported to Corporations Canada, but it must be done so separately. Voluntary reporting is permitted if the client is considered low-risk, but discrepancies are still found.
Reports are submitted through Corporations Canada’s online portal (accessed through the registry). The process is as follows:
For more detailed steps on reporting, you may refer to the guidance on submitting a beneficial ownership discrepancy report or the following Corporations Canada demo video, which together provide a comprehensive overview.
Note that inaccurate or incomplete reporting entity information will result in an invalid Beneficial Ownership discrepancy report. Amendments to submitted reports are currently not possible, and a new report will have to be submitted.
Reporting entities must retain the report acknowledgment and other supporting documentation as evidence of meeting obligations.
If you would like assistance in understanding what these changes mean to your business, or if you need help updating your compliance program and processes, please get in touch.
Are you a money services business (MSB) that serves clients in Canada? Have you checked your MSB registration lately? If not, there’s no time like the present, and you can do so here.
There have been some changes to the process for updating registration information with the Financial Transactions and Reports Analysis Centre of Canada (FINTRAC) that may not be immediately apparent, and further changes are forthcoming. As a reminder, when an MSBs’ information changes, including products, locations, key personnel such as the Compliance Officer, ownership, or agents, that information must be updated with FINTRAC within 30 days. MSB registration must also be renewed prior to the registration’s expiry date.
When your MSB registration information changes, the first step is to complete the change form on FINTRAC’s website and remember to submit it within 30 days of the change. This form has a number of checkboxes that must be selected, depending on the specific updates that are being requested, as well as a freeform field that can be used to provide additional information (but be brief, there is a 100-character limit). There is also an option to download and save a copy of the completed form, which should be kept as part of your AML records.
Once FINTRAC has received the form, they will reach out, usually to the email address provided in the form, with next steps. The most common next step is currently for FINTRAC to send a PDF form using Canada Post Connect (a secure portal for messages and document sharing), which must be completed and returned within a specific timeframe. As with the online registration form, you should save a copy of your completed change form.
Before your MSB registration expires, complete the renewal form on FINTRAC’s website. Remember, your MSB registration is valid for two years, and you need to renew it before it expires. This form is different from the change form, but does have a checkbox that must be selected if there are also changes to MSB registration information, as well as a freeform field that can be used to provide additional information (remember to be brief, as there is a 100-character limit). There is also an option to download and save a copy of the completed form, which should be kept as part of your AML records. You can also use the save a copy function to download a form in progress, which can be re-uploaded and completed later.
Once FINTRAC has received the form, they will reach out, usually to the email address provided in the form, with next steps. If there are changes to MSB registration information, the most common next step is currently for FINTRAC to send a PDF form using Canada Post Connect (a secure portal for messages and document sharing), which must be completed and returned within a specific timeframe. We recommend whitelisting @fintrac-canafe.gc.ca and @canadapost-postescanada.ca addresses, so that they don’t get caught in your spam filters.
In either of the above scenarios, we recommend that you always download and keep a copy of the registration details, which include the time and date when you submitted the document, so you have proof if required at a later date.
Prior to last year, MSBs received email reminders from FINTRAC when their registration was expiring, but it doesn’t seem that this is the case. You should not expect a notification from FINTRAC when your MSB registration is set to expire. We recommend setting a reminder in your calendar for 30 days before the registration expires, to make sure the form is submitted on time.
Whether you need assistance with your FINTRAC registration or AML compliance in general, you can contact us here or by email at info@outliercanada.com.
Today marks another milestone for us – 12 years since Outlier Compliance Group was founded.
What began as a bold and novel idea, building a consulting firm made up exclusively of seasoned compliance professionals with deep in-house experience, has grown into a thriving, trusted partner for clients navigating Canada’s ever-changing regulatory landscape.
Our name, inspired by Malcolm Gladwell’s “Outliers, the Story of Success” which espoused the notion that to be truly proficient in a skill, 10,000 hours of practice is required. That was the bar that was set, met, and most often exceeded by every compliance professional that joined our team over the years.
Over the years, we’ve grown, evolved, but have stayed true to our roots. We’ve learned that success comes from surrounding ourselves with exceptional people, from listening closely to our clients, and from being willing to adapt in the face of change. We’ve discovered the value of curiosity when navigating complexity, and the power of collaboration when tackling the most challenging problems.
Through it all, our mission has remained the same “good compliance is good business”. It’s the principle that guides our work, shapes our advice, and underpins every solution we deliver.
As the Canadian regulatory environment becomes increasingly complex, our mission and our learnings will play to our continued success and growth as we continue to provide top tier compliance and risk management services.
To our amazing team, past, present and future, thank you for your passion, expertise and resilience. To our clients, partners and industry peers, thank you for your trust and collaboration. Lastly, but by no means least, a special thank you to our CEO, David Vijan, and our Chairperson, Amber D. Scott, for keeping us on our toes and steering the ship with vision and purpose.
Here’s to 12 years of achievement and to the future.
BackgroundWe recently sought clarification from FINTRAC as it relates to identification requirements that Factoring Companies (Factors) must comply with.
Factors supply liquidity to a customer in exchange for the cash value of a certain amount of the customer’s accounts receivable (i.e. invoices) to be collected later by the factoring company. A factor is defined as a person or entity that is engaged in the business of factoring, with or without recourse against the assignor.
If you missed it, Factors became reporting entities under the PCMLTFA effective April 1, 2025. As a reporting entity, Factors must have in place a compliance program and comply with various requirements, including identification requirements. Please refer to our previous blog post on Factors that outlines full requirements that factors must comply with.
Factors must confirm identification using prescribed methods for individuals and entities where they are required to keep a record as defined under section 24.14 of the
Proceeds of Crime (Money Laundering) and Terrorist Financing Regulations.
Section 24.14 states a factor shall keep the following records in respect of every factoring agreement that it enters into:
(a) an information record in respect of the person or entity with whom it enters into the agreement;
(b) if the information record is in respect of an entity, a record of the name, address and date of birth of every person who enters into the agreement on behalf of the entity and the nature of the person’s principal business or their occupation;
(c) if the information record is in respect of a corporation, a copy of the part of official corporate records that contains any provision relating to the power to bind the corporation in respect of transactions with the factor;
(d) a record of the financial capacity of the person or entity with which it enters into the agreement and the terms of the agreement;
(e) for any payment it makes; and
(f) a receipt of funds record in respect of every amount of $3,000 or more that it receives, unless the amount is received from a financial entity or public body or from a person who is acting on behalf of a client that is a financial entity or public body.
As it relates to the last record, funds may come from a party other than the factoring client (a third party) and in such instances it is not sufficient to rely on identification that would have been completed for the factoring client, but rather the third party would have to be identified.
Below is a response from FINTRAC:
Under the PCMLTFA, specifically section 24.14(f), a receipt of funds record must be kept for every amount of $3,000 or more, unless the funds are received from a financial entity, public body, or a person acting on behalf of such an entity.
In response to your question:
If funds are received from a party other than the identified factoring client, identification requirements may still apply depending on who that third party is.
If the third party is not:
then yes, identification and a receipt of funds record would be required, even if the factoring client has already been identified. This is because the receipt of funds record pertains to who the funds are actually received from, not just who the factoring agreement is with.
Identification of the factoring client alone is not sufficient if funds are received from another party who does not fall under the exemptions in s. 24.14(f). The source of funds must be identified and recorded accordingly.
The factoring company must take reasonable measures to identify the sender, document those efforts, and keep a receipt of funds record.
While this may prove to be challenging in some instances, demonstrating that reasonable measures were taken becomes critical.
If you would like assistance in understanding what this mean to your business, or if you need help in creating or updating your compliance program and processes, please get in touch.
We’re seeing FINTRAC ramp up Administrative Monetary Penalties against all sectors, however, for securities dealers we’re starting to see some heavy hits, something we haven’t seen before, signaling a graduated approach to compliance assessments by FINTRAC.
On July 3, 2025, FINTRAC announced an Administrative Monetary Penalty of $544,500 against an investment dealer headquartered in Vancouver, British Columbia. Additionally, on February 13, 2025, FINTRAC announced an Administrative Monetary Penalty of $66,000 against, a Wealth Management Securities Dealer in Ontario.
Securities dealers must fulfill specific obligations as required by the Proceeds of Crime (Money Laundering) and Terrorist Financing Act (PCMLTFA) and associated Regulations, to help combat money laundering and terrorist activity financing in Canada. As defined under the PCMLTFA, a securities dealer means a person or entity authorized under provincial legislation to engage in the business of dealing in securities or any other financial instruments or to provide portfolio management or investment advising services.
FINTRAC has the legislative authority to issue administrative monetary penalties (AMPs) to reporting entities that are found to be non-compliant with the PCMLTFA and associated Regulations. For more information, see Penalties for non-compliance.
Between the two notices, it was found that following compliance examinations, the following failures were found, which resulted in the AMPs:
Of all the findings, the ones that netted the highest AMP were related specifically to:
Failures in suspicious transaction reporting continue to be a big focus for FINTRAC and a trend with the larger value AMPs that we’ve been seeing.
Securities dealers are responsible for the following requirements under the PCMLTFA and associated Regulations:
If you need help in creating or updating your compliance program and processes, are due for a Compliance Effectiveness Review, or have general questions on your compliance obligations, please get in touch.
When it comes to AML compliance, submitting a Suspicious Transaction Report (STR) to FINTRAC is just the beginning, not the end.
In this short video presentation, Divya Bhaktha from Outlier Compliance Group breaks down exactly what you need to do after an STR is filed, and the consequences if you don’t follow-up correctly.
Public notice of administrative monetary penalties
Reporting suspicious transactions to FINTRAC
Guide on harm done assessment for suspicious transaction reports violations (section 2.3.4)
Need help navigating STR obligations? Email us at info@outliercanada.com or get in touch here.
With only 60 days left, the Bank of Canada (BoC)’s operational framework for payment service providers (PSPs) will come into force under the Retail Payment Activities Act (RPAA) and Retail Payment Activities Regulations (RPAR) – collectively referred to as Retail Payments Supervision (RPS) on September 8, 2025. If your business performs any of the following five payment functions, RPS apply to you, and you should already be registered with the BoC:
With the deadline approaching, PSPs should be close to finalizing their operational risk and incident response policy frameworks which must include mapping all operational risk factors to BoC guidance. Key areas to focus on include:
Additionally, PSPs that hold end-user funds must adhere to the safeguarding requirements under RPS. To safeguard funds on behalf of end-users, PSPs must utilize one of the following methods:
As a reminder, RPS requirements are in addition to your existing AML obligations under the Proceeds of Crime (Money Laundering) and Terrorist Financing Act (PCMLTFA). We’re advising clients every day to align their policies, controls, and documentation to meet the BoC’s expectations. This often means creating and implementing new frameworks for many organizations. If you haven’t finalized your framework yet, now is the time to act.
Outlier is here to help, so please get in touch.
Earlier this week I was approached by a client with whom we had completed a full overhaul of their Risk Assessment documentation, which occurred about 3-4 months ago. The project was completed with excellent results, and from all accounts, an ideal outcome. Mainly, the client was satisfied with the deliverable, felt more confident in the status of their overall compliance program, and was a delight to work with.
When they reached out this week, they were inquiring about Outlier completing their upcoming 2 year Compliance Effectiveness Review (CER). This was a clear indication of their satisfaction, which was a good feeling. However, we had to keep in mind that we (Outlier) revised their Risk Assessment documentation not too long ago. After some internal discussion, we felt it was not the right move for us to take on their CER, as we would be reviewing a portion of our own work. Not only would this be less value to the client, but should their financial service provider or FINTRAC determine that their reviewer was also the drafter of a portion of the compliance documentation, that would be a bad look. FINTRAC guidance states “Also, as a best practice, to ensure that your review is impartial, it should not be conducted by someone who is directly involved in your compliance program activities.”
Informing the client about our perceived conflict, and that it would not be the right move given the situation, felt less than optimal. No one wants to turn business away. However, the response was received with grace and understanding. This isn’t a shock as this individual is, in my opinion, an underrated pillar of the AML community, and generally, a person with a high degree of integrity.
This post is not intended to be a self-congratulatory post, but rather a message to highlight an important point for reporting entities. We have sat through examinations with clients where FINTRAC has identified the lack of separation between the drafter of the documentation and reviewer of the documentation. This situation left the reporting entity in a position they could not defend, resulting in, what I deem, an entirely unnecessary position. Had the reviewer acted with integrity, by informing the reporting entity about the potential risk and downfalls, the FINTRAC examination would have resulted in a more favorable outcome, including one less deficiency.
From my experience, the separation between the drafter and reviewer should go beyond merely assigning different people, or different departments, within the same organization because the baseline knowledge is consistent across the business. You want completely fresh eyes on your compliance program and its effectiveness.
The intent of this post is to serve as an FYI to reporting entities that relying on one firm to handle all aspects of compliance support is not an ideal scenario and can lead to problems down the line. There is no shortage of fantastic compliance consulting firms in Canada, each with deep expertise when it comes to Canadian regulatory requirements and FINTRAC expectations. If you would like some suggestions on additional firms that can offer compliance support, please feel free to reach out to us, and we can make warm introductions to other trusted firms.
Finally, this also raises concerns regarding independence of the CER process when the same company is engaged for multiple reviews in succession. We have strongly suggested to a few longstanding clients that they source a different reviewer for a “fresh set of eyes,” after completing multiple CERs for them previously. We have also received feedback from clients that during FINTRAC exams, FINTRAC examiners are suggesting the same thing. While its nice to have a good relationship with your compliance support providers, there comes a point where a changeup is not only suggested, it is necessary. It’s better to make the choice yourself, rather than have FINTRAC make it for you.
If you are in need of a completely independent reviewer, a suggestion for a couple of different options, or just have general questions, please feel free to contact us. We are here to help, and truly believe that rising tides lift all boats.
On March 26, 2025 final amendments to the Proceeds of Crime (Money Laundering) and Terrorist Financing Regulations were officially published in the Canada Gazette (SOR/2025-68). This round of anticipated changes introduces three company types that will become reporting entities. Below, we summarize the requirements that Factoring Companies will have to comply with as of April 1, 2025.
Factoring Companies (Factors)
Factors supply liquidity to a customer in exchange for the cash value of a certain amount of the customer’s accounts receivable (i.e. invoices) to be collected later by the factoring company. A factor is defined as a person or entity that is engaged in the business of factoring, with or without recourse against the assignor.
All reporting entities (including Factoring Companies, as of April 1, 2025) must have in place a compliance program as defined under the PCMLTFA and associated regulations. The following is a summary of the requirements, as well as links to FINTRAC guidance (some of which will need to be updated).
Factoring Companies should start working on developing their compliance program immediately if they have not done so already. FINTRAC has updated their sector-specific guidance page with relevant information for this new reporting entity and should be read.
If you would like assistance in understanding what these changes mean to your business, or if you need help in creating or updating your compliance program and processes, please get in touch.
