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• 138 (1) Every person or entity that is required to verify an entity’s identity in accordance with these Regulations shall, at the time the entity’s identity is verified, obtain the following information:

  • (a) in the case of a corporation, the names of all directors of the corporation and the names and addresses of all persons who own or control, directly or indirectly, 25% or more of the shares of the corporation;

  • (a.1) in the case of a widely held or publicly traded trust, the names of all trustees of the trust and the names and addresses of all persons who own or control, directly or indirectly, 25% or more of the units of the trust;

  • (b) in the case of a trust, the names and addresses of all trustees and all known beneficiaries and settlors of the trust;

  • (c) in the case of an entity other than a corporation or trust, the names and addresses of all persons who own or control, directly or indirectly, 25% or more of the entity; and

  • (d) in all cases, information establishing the ownership, control and structure of the entity.

• (2) Every person and entity that is subject to subsection (1) shall take reasonable measures to confirm the accuracy of the information when it is first obtained under that subsection and in the course of ongoing monitoring of business relationships.

• (3) The person or entity shall keep a record that sets out the information and the measures taken to confirm the accuracy of the information.

• (4) If the person or entity is not able to obtain the information, to keep it up to date in the course of ongoing monitoring of business relationships or to confirm its accuracy, the person or entity shall take

  • (a) reasonable measures to verify the identity of the entity’s chief executive officer or the person who performs that function; and

  • (b) the special measures referred to in section 157.

• (5) If the entity whose identity is being verified under subsection (1) is a not-for-profit organization, the person or entity shall determine and keep a record that sets out whether that entity is

  • (a) a charity registered with the Canada Revenue Agency under theIncome Tax Act; or

  • (b) an organization, other than one referred to in paragraph (a), that solicits charitable donations from the public.

• (6) This section does not apply in respect of a group plan account held within a dividend reinvestment plan or a distribution reinvestment plan, including a plan that permits purchases of additional shares or units by the member with contributions other than the dividends or distributions paid by the sponsor of the plan, if the sponsor of the plan is an entity whose shares or units are traded on a Canadian stock exchange, and that operates in a country that is a member of the Financial Action Task Force.

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• 135 (1) A person or entity that is required under these Regulations to keep a signature card or an account operating agreement shall, when they open the account, take reasonable measures to determine whether the account will be used by or on behalf of a third party.

• (2) If the person or entity determines that the account will be used by or on behalf of a third party, the person or entity shall take reasonable measures to obtain the following information and shall keep a record of the information obtained:

  • (a) if the third party is a person, their name, address, telephone number and date of birth and the nature of their principal business or their occupation;

  • (b) if the third party is an entity, its name, address and telephone number, the nature of its principal business, its registration or incorporation number and the jurisdiction and country of issue of that number; and

  • (c) the relationship between the third party and each account holder.

• (3) If the person or entity is not able to determine whether the account will be used by or on behalf of a third party but there are reasonable grounds to suspect that it will, the person or entity shall keep a record that

  • (a) indicates whether, according to a person who is authorized to act in respect of the account, the account will only be used by or on behalf of an account holder; and

  • (b) describes the reasonable grounds to suspect that the account will be used by or on behalf of a third party.

• (4) Subsection (1) does not apply if every account holder is a financial entity or a securities dealer that is engaged in the business of dealing in securities in Canada.

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• (5) Subsection (2) does not apply if a securities dealer is required to keep an account operating agreement in respect of an account of a person or entity that is engaged in the business of dealing in securities only outside Canada and

  • (a) the account is in a country that is a member of the Financial Action Task Force;

  • (b) the account is in a country that is not a member of the Financial Action Task Force but has implemented the Financial Action Task Force’s recommendations relating to client identification and, when the account is opened, the securities dealer has obtained written assurance from the account holder that the country has implemented those recommendations; or

  • (c) the account is in a country that is not a member of the Financial Action Task Force and has not implemented the Financial Action Task Force’s recommendations relating to client identification but, when the account is opened, the securities dealer has verified the identity of all third parties in accordance with subsection 105(1), 109(1) or 112(1).

• (6) Subsection (2) does not apply where

  • (a) the account is opened by a legal counsel, an accountant or a real estate broker or sales representative; and

  • (b) the person or entity has reasonable grounds to believe that the account is to be used only for clients of the legal counsel, accountant or real estate broker or sales representative, as the case may be.

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• 156 (1) For the purposes of subsection 9.6(1) of the Act, a person or entity referred to in that subsection shall implement the compliance program referred to in that subsection by

  • (a) appointing a person who is to be responsible for implementing the program or, in the case of a person, taking responsibility for implementing the program;

  • (b) developing and applying written compliance policies and procedures that are kept up to date and, in the case of an entity, are approved by a senior officer;

  • (c) assessing and documenting the risk referred to in subsection 9.6(2) of the Act, taking into consideration

    • [...]

    • (iii) the geographic location of their activities,

    • (iv) in the case of an entity that is referred to in any of paragraphs 5(a) to (g) of the Act, any risk resulting from the activities of an entity that is affiliated with it and that either is referred to in any of those paragraphs or carries out activities outside Canada that are similar to those of a person or entity referred to in any of those paragraphs, and

  • (d) if the person or entity has employees, agents or mandataries or other persons who are authorized to act on their behalf, developing and maintaining a written, ongoing compliance training program for those employees, agents or mandataries or other persons;

  • (e) instituting and documenting a plan for the ongoing compliance training program and delivering the training; and

  • (f) instituting and documenting a plan for a review of the compliance program for the purpose of testing its effectiveness.

• (2) If the person or entity intends to carry out a new development or introduce a new technology that may have an impact on their clients, business relationships, products, services or delivery channels or the geographic location of their activities, they shall, in accordance with paragraph (1)(c), assess and document the risk referred to in subsection 9.6(2) of the Act before doing so.

• (3) A review referred to in paragraph (1)(f) shall be carried out and the results documented every two years by an internal or external auditor of the person or entity, or by the person or entity if they do not have an auditor.

• (4) An entity shall report the findings of the review, any updates made to the policies and procedures within the reporting period and the status of the implementation of those updates in writing to a senior officer within 30 days after the day on which the review is completed.

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• 155 (1) If a person or entity verifies a person’s identity in accordance with subsection 105(1) and complies with section 108 — or if, before the coming into force of this subsection, they ascertained a person’s identity in accordance with these Regulations, and complied with the related record-keeping provisions, as they read at the time — they are not required to verify the person’s identity again unless they have doubts about the information that was used for that purpose.

• (2) If a person or entity verifies a corporation’s identity in accordance with subsection 109(1) — or if, before the coming into force of this subsection, they confirmed the corporation’s existence and ascertained its name and address and the names of its directors in accordance with these Regulations, and complied with the related record-keeping provisions, as they read at the time — they are not required to verify it again unless they have doubts about the information that was used for that purpose.

• (3) If a person or entity verifies the identity of an entity other than a corporation in accordance with subsection 112(1) — or if, before the coming into force of this subsection, they confirmed the entity’s existence in accordance with these Regulations, and complied with the related record-keeping provisions, as they read at the time — they are not required to verify it again unless they have doubts about the information that was used for that purpose.

• (4) If a person or entity determines that a person is a politically exposed foreign person or a family member, referred to in subsection 2(1), of such a person — or if, before the coming into force of this subsection, they determined that a person is a politically exposed foreign person, as defined in subsection 9.3(3) of the Act as it read at the time the determination was made — they are not required to make the determination again.

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• 154 (1) Subparagraphs 86(a)(i) and (ii), paragraphs 87(a), 89(a) and (d), 94(a), 103(a) and 116(1)(a) and subsections 116(2) and (3), 119(1) to (3) and 120.2(1), (2) and (4) do not apply in respect of

  • (a) a business account, if the financial entity, securities dealer or casino has already verified the identity of at least three persons who are authorized to give instructions in respect of the account;

  • (b) a person who already has an account with the financial entity, securities dealer or casino, as the case may be; or

  • (c) an account that is opened at the request of an entity for the deposit by a life insurance company that is affiliated with the entity of a death benefit under a life insurance policy or annuity if

    • (i) the account is opened in the name of a beneficiary that is a person,

    • (ii) only that death benefit may be deposited into the account, and

    • (iii) the policy or annuity contract under which the claim for the death benefit is made has been in existence for a period of at least two years before the day on which the claim is made; and

  • (d) an account that is opened for the sale of mutual funds if there are reasonable grounds to believe that identity has been verified in accordance with subsection 105(1) by a securities dealer in respect of

    • (i) the sale of the mutual funds for which the account has been opened, or

• (2) Sections 12 to 14, 22, 29, 43, 45 and 52, subsection 58(1), sections 64, 74, 82, 86 to 89, 92, 94, 96, 97 and 100, subsection 101(1) and sections 102 to 104, 116, 117, 119 to 120.2 and 123 do not apply in respect of

  • (a) the sale of an exempt policy as defined in subsection 306(1) of theIncome Tax Regulations;

  • (b) the sale of a group life insurance policy that does not provide for a cash surrender value or a savings component;

  • (c) the sale of an immediate or deferred annuity that is paid for entirely with funds that are directly transferred from a registered pension plan or from a pension plan that is required to be registered under thePension Benefits Standards Act, 1985, or similar provincial legislation;

  • (d) the sale of a registered annuity policy or a registered retirement income fund;

  • (e) the sale of an immediate or deferred annuity that is paid for entirely with the proceeds of a group life insurance policy;

  • [...]

  • (g) the opening of an account for the deposit and sale of shares from a corporate demutualization or the privatization of a Crown corporation;

  • (h) the opening of an account in the name of an affiliate of a financial entity, if the affiliate carries out activities that are similar to those of persons and entities referred to in paragraphs 5(a) to (g) of the Act;

  • (i) the opening of a registered plan account, including a locked-in retirement plan account, a registered retirement savings plan account and a group registered retirement savings plan account;

  • (j) the opening of an account established in accordance with the escrow requirements of a Canadian securities regulator or Canadian stock exchange or provincial legislation;

  • (k) the opening of an account if the account holder or settlor is a pension fund that is regulated under federal or provincial legislation;

  • (l) the opening of an account in the name of, or in respect of which instructions are authorized to be given by, a financial entity, a securities dealer, a life insurance company or an investment fund that is regulated under provincial securities legislation;

  • [...]

  • (n) a corporation or trust that has minimum net assets of $75 million on its last audited balance sheet, whose shares or units are traded on a Canadian stock exchange or a stock exchange designated under subsection 262(1) of theIncome Tax Act and that operates in a country that is a member of the Financial Action Task Force;

  • (o) a subsidiary of a public body referred to in paragraph (m) or a corporation or trust referred to in paragraph (n) whose financial statements are consolidated with the financial statements of that public body, corporation or trust; or

  • (p) the opening of an account solely in the course of providing accounting services to a securities dealer.

• (3) A financial entity, securities dealer, life insurance company or life insurance broker or agent is not required to verify the identity of, or to keep a signature card for, a person who is a member of a group plan account or to determine whether they are a politically exposed foreign person, a politically exposed domestic person or a head of an international organization, or a family member — referred to in subsection 2(1) — of, or a person who is closely associated with, one of those persons if

  • (a) the member’s contributions are made by the sponsor of the plan or by means of payroll deductions; and

  • (b) the identity of the plan sponsor has been verified in accordance with subsection 109(1) or 112(1).

• (4) Subsections (1) to (3) do not apply if a person or entity conducts or attempts to conduct a transaction that is required to be reported to the Centre under section 7 of the Act.

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