Financial institutions in Canada are obliged to put in place best-suited policies for their activities, as Canadian legislation states. When it comes to the main financial regulator, the OSFI publishes regulations and guidelines on the regular basis. Canadian banks also have requirements to fulfill: to ensure proper liquidity forms and an adequate amount of capital.
Operating with securities in Canada
Financial institutions whose activities involve securities are required to:
- Follow proper policies and procedures
- Put in place internal control systems
- Appoint a CCO to enforce procedures and policies.
Financial institutions holding securities have an obligation to:
- Report suspicious transactions and fraudulent activities
- Perform testing on operational risks
- Arrange activities to ensure KYC.
Moreover, it is necessary for financial institutions to train and inform their personnel sufficiently about identifying risks related to violations of AML/CFT.
For registering a financial company in Canada, it is needed to establish committees with the following tasks:
- Audit and inspection
- Identification and resolving conflicts of interest
- Client service – providing information and processing complaints.
Not too long ago, the OSFI stated that institutions are expected to perform assessments of operational risks, too.
Regulation of financial companies
According to the legislation of Canada, directors of financial institutions must carry out these responsibilities:
- Overseeing and managing activities of an institution
- Setting up committees for audit and review
- Handling complaints and info requests from clients
- Resolving conflicts of interest.
Additionally, Members of the Board of directors have a duty to bear personal responsibility in cases when an institution allows a violation or fails to respond to it.
A right to complain
In Canada clients of financial institutions have an opportunity to file a complaint via regulatory and independent bodies. Also, if a provider of financial services commits any kind of law violation, clients can use their right to claim damages against such providers.
Services of complaint authorities must be accepted by financial institutions; although their advice regarding financial disputes is not necessary to be used.
Understanding Canadian legislation is crucial for being able to provide financial services in Canada. Monitoring information such as compliance with many requirements and AML/CFT rules can be challenging, but we are here to help.
Contact COREDO to arrange a personal consultation with our specialists about the regulation of financial institutions in Canada.