Chapter 10 - v1.3

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Questions and Answers

What is one primary purpose of maintaining records for registrants?

To accurately record business practices and demonstrate compliance. (correct)

To fulfill administrative requirements unrelated to client transactions.

To serve as a marketing tool for business expansion.

To streamline communication within the compliance department.

How must records be stored according to the compliance requirements?

Only in hard copy to avoid data loss.

In a temporary electronic folder accessible by all employees.

In separate locations for each department to enhance security.

In a safe location in durable form for quick access by regulators. (correct)

What type of records do regulators require to be accessible?

Records that have been reviewed by legal departments only.

Only electronic records that can be emailed.

Only hard copy records that are physically present on-site.

All records maintained in any format as long as they are accessible. (correct)

Why might compliance staff rely on the legal department regarding recordkeeping?

To stay informed about changes to recordkeeping requirements. Signup and view all the answers

What is a potential issue when records are created and maintained offsite?

The firm must have a policy for format and retrieval methods. Signup and view all the answers

Under CIRO Rules, how is a 'record' defined?

Any documentation including electronic records related to a Regulated Person’s business. Signup and view all the answers

Which factor is NOT typically considered when implementing recordkeeping systems?

The size of the compliance department. Signup and view all the answers

What must firms dictate when circulating preliminary prospectuses by business location staff?

The procedure and format for recording recipient names. Signup and view all the answers

What does the dynamic nature of recordkeeping requirements imply for compliance departments?

They need to regularly update their knowledge of applicable regulations. Signup and view all the answers

What is the maximum time frame within which dealer members must provide records to FINTRAC upon request?

30 days Signup and view all the answers

For how long must a dealer member retain signature cards and account operating agreements after closing an account?

Five years Signup and view all the answers

Under the PCMLTFA, what type of reports must dealer members submit when suspicious transactions are detected?

Reports to FINTRAC Signup and view all the answers

What must dealer members do if they possess property known to be owned by a suspected terrorist?

Submit a terrorist property report without delay Signup and view all the answers

Which entity must dealer members register with to ensure timely electronic reporting?

FINTRAC Signup and view all the answers

What constitutes a requirement for dealer members to submit suspicious transaction reports?

Reasonable grounds to suspect a transaction is linked to money laundering Signup and view all the answers

What is the role of the chief anti-money laundering officer in a dealer member's organization?

To oversee compliance and reporting requirements Signup and view all the answers

When must a dealer member submit a suspicious transaction report?

Immediately upon suspicion Signup and view all the answers

What information must dealer members retain for beneficial ownership records?

For five years from the last business transaction Signup and view all the answers

Which of the following is a requirement under PCMLTFA for dealer members?

To ensure proper electronic reporting capabilities Signup and view all the answers

What must a compliance officer do first when establishing a money laundering prevention program according to FINTRAC guidelines?

Appoint a compliance officer Signup and view all the answers

Which of the following actions is NOT required if a potential violation of UMIR is identified?

Notify law enforcement immediately Signup and view all the answers

How long must records of reports, reviews, and findings be retained by dealer members?

Seven years Signup and view all the answers

What is the main purpose of the requirements under PCMLTFA for securities dealers?

To support detection of money laundering Signup and view all the answers

What should a supervisor do upon receiving a report of potential misconduct according to UMIR?

Conduct a review in accordance with policies Signup and view all the answers

Which rule specifically outlines gatekeeper obligations for reporting potential breaches?

Rule 10.16 Signup and view all the answers

What action must be taken by a compliance officer concerning CIRO inspections?

Allow CIRO to inspect during business hours Signup and view all the answers

What is the consequence of identifying a violation during an investigation?

CIRO must be informed no later than the 15th of the following month Signup and view all the answers

What requirement does a participant NOT have under UMIR regarding misconduct?

Make oral reports only Signup and view all the answers

Which of the following is TRUE regarding reporting obligations under UMIR?

Gatekeeper obligations apply to all participants Signup and view all the answers

What is the primary purpose of establishing specific limits for the amount and type of personal information collected by dealer members?

To reduce risks of inappropriate use and disclosure of information. Signup and view all the answers

Which role is typically responsible for ensuring that front-line employees can handle client requests for personal information?

The Compliance Officer (CCO) Signup and view all the answers

What action must dealer members take if a client refuses to consent to the collection, use, or disclosure of their personal information?

Refuse to accept or administer the client's account. Signup and view all the answers

What is the maximum time frame within which a firm must provide access to personal information after a client request?

30 days Signup and view all the answers

Which of the following is NOT a duty of the privacy officer regarding personal information?

Analyze market trends using personal information. Signup and view all the answers

What is one of the key methods a dealer member should utilize to safeguard personal information during transmission?

Implementing appropriate security measures for data sent over the Internet. Signup and view all the answers

What immediate action must be taken if a transaction involves property related to a terrorist group?

The property must be frozen immediately. Signup and view all the answers

What is the cash transaction threshold that requires a report to FINTRAC?

$10,000 or more Signup and view all the answers

When must dealer members report large cash transactions to FINTRAC?

For two or more transactions of $10,000 or more in a 24-hour period. Signup and view all the answers

Which group must dealer members notify if they control property owned by a listed person?

Royal Canadian Mounted Police (RCMP) Signup and view all the answers

What should be remembered regarding the reporting of cash or monetary instruments during cross-border movement?

All cash over $10,000 must be reported to a customs officer. Signup and view all the answers

What exemption exists for securities when imported to Canadian dealer members?

Securities imported by courier or mail are exempt from cash reporting. Signup and view all the answers

How often must dealer members review their compliance regime according to Guideline 4?

Every two years Signup and view all the answers

Which action might occur if items are not properly recorded during cross-border movements?

They can be seized and may incur a fine. Signup and view all the answers

Which of the following statements about dealer members' policies on large cash transactions is true?

All clients must be informed of large cash acceptance policies. Signup and view all the answers

Study Notes

Recordkeeping Requirements

Dealer members must maintain records to accurately document business practices, financial transactions, and client interactions.
Records must be maintained in a safe location in a "durable form" and easily accessible upon request by regulators.
Electronic recordkeeping is becoming increasingly common, but paper records are sometimes required for compliance.
Records of supervision, business locations, and preliminary prospectuses must be accessible.
UMIR rules require specific markers for certain types of orders.
Gatekeeper obligations require immediate reporting of potential violations to supervisors or compliance staff.
A written record must be made of the report, review, and findings.
If a violation is identified, the findings must be reported to CIRO within 15 days of the month following the month in which the findings were made.
Records of reports, reviews, and findings must be retained for at least seven years.

FINTRAC Compliance

Dealers must comply with PCMLTFA regulations for reporting, client identification, and recordkeeping.
Dealers must appoint a compliance officer to oversee the development and implementation of a money laundering and terrorist financing prevention program.
Records must be kept for a minimum of five years and easily accessible for FINTRAC review within 30 days of a request.
Dealer members are required to submit reports to FINTRAC when there are reasonable grounds to suspect a transaction is related to money laundering or terrorist financing.
Suspicious transactions must be reported to FINTRAC as soon as possible after reasonable grounds for suspicion have been determined.
Terrorist Property reports must be immediately submitted to FINTRAC, the RCMP, CSIS, and CIRO.
Large cash transactions over $10,000 require a report to FINTRAC.
Dealers must submit a monthly report to CIRO disclosing any property owned or controlled by a "listed person".
Importing or exporting $10,000 or more in cash or monetary instruments requires reporting to customs officers.

Privacy Legislation

Dealers must comply with PIPEDA and similar provincial privacy legislation.
Privacy policies should set specific limits for the collection of personal information.
Procedures for handling requests for access to personal information must be established.
Dealers must disclose to clients how their information is being used and to whom it will be disclosed.
Clients must be informed that their information may be provided to regulators upon request.
Timelines for the retention and destruction of personal information must be established.
Safeguards should be implemented to protect the confidentiality of personal information.

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Description

Test your knowledge on the recordkeeping requirements mandated by FINTRAC for dealer members. This quiz covers the necessary documentation for business practices, financial transactions, and compliance obligations. Understand the importance of maintaining accurate records in both electronic and paper formats.