A Platform Approach to Effortless Compliance: Adhering to FINTRAC's Reporting Changes

As a foreign exchange (forex) broker or money services business, staying compliant with regulatory changes can feel like a never ending challenge fraught with complexity — especially for those in Canada right now impacted by the recent changes Financial Transactions and Reports Analysis Centre of Canada (FINTRAC) are rolling out. It's natural for organizations to feel overwhelmed by the impending changes due to the inherent intricacies.

We provide an overview of the FINTRAC changes you should be aware of and a recommendation for a more strategic approach in this article. 

Changes to FINTRAC Reporting Forms

Since 2022, FINTRAC has undertaken an initiative to update and modernize several reporting forms, including the Large Cash Transaction Report (LCTR), Suspicious Transaction Report (STR), Electronic Funds Transfer Report (EFTR), and Casino Disbursement Report (CDR). It’s critical that entities with reporting obligations keep up with applicable legislative changes and implementation dates to maintain compliance. 

Here is an overview of the FINTRAC reporting obligation changes for 2024 and the timeline for implementing changes to the reporting forms: 

Suspicious Transaction Report (STR)

A STR must be submitted when there are reasonable grounds to suspect that a transaction is related to the commission or attempted commission of a money laundering or terrorist activity financing offense. There is no monetary threshold associated with the reporting of a suspicious transaction under the Canadian anti-money laundering and anti-terrorist financing (AML/ATF) regime.

A STR must be submitted as soon as practicable after completing measures determining that there are reasonable grounds to suspect that a transaction is related to a money laundering/terrorist financing (ML/TF) offense.

The reported implementation date for the STR was June 2023, and the anticipated form release date is April 6, 2024.

Electronic Funds Transfer Report (EFTR)

An EFTR must be submitted for the instructions to transfer $10,000 CAD or more out of, or into, Canada in a single transaction; or in two or more transactions totaling $10,000 CAD or more made within 24 consecutive hours by or on behalf of the same individual or entity.

Incoming and outgoing international electronic funds transfers (EFTs) must be reported no later than five working days after the day of the transmission of the instructions.

The anticipated implementation date for the EFTR is September 2023, and the anticipated form release date is June 2024.

Casino Disbursement Report (CDR)

A CDR must be submitted by a casino when it makes a disbursement of $10,000 CAD or more in a single transaction, or upon making two or more disbursements totaling $10,000 CAD or more within 24 consecutive hours that are received by or on behalf of the same individual or entity.

A CDR must be filed within 15 calendar days after the disbursement.

The anticipated implementation date for the CDR is October 2023, and the anticipated form release date is June 2024.

FINTRAC’s new Reporting API

FINTRAC is also migrating to using a REST API for reporting transactions (i.e., EFTR, CDR, STR). They will be retiring their current integration service through CloudMask at the same time, which means reporting entities will need to set up an independent integration service, like Kooltra, or submit the reports manually after this change is live.

Additionally, the 24-hour rule implementation is changing with the June deadline. The new REST API requires the reporter to specify which aggregation method (conductor, beneficiary, or requestor) was used to determine whether an EFT was reportable under the 24-hour rule. This requirement will likely result in business logic updates for reporters and service providers to comply. 

An Invitation to the Future of Compliance

Organizations can either constantly adapt to the new information gathering and reporting practices imposed by regulators, or fundamentally rethink their compliance architecture for long term agility and scalability.

Enter Kooltra, a Canadian headquartered global leader in foreign exchange and global payments infrastructure. We provide an alternative to building and rebuilding your in house systems. By integrating with Kooltra, you are no longer playing defense to the demands of regulation changes, but seizing control of your data to support an agile compliance approach.

With our innovative and scalable technology, Kooltra not only simplifies the compliance landscape but also enhances operational efficiency, reduces costs, and automates the labyrinth of regulatory reporting you'll always be navigating.

Once your data is in the Kooltra Core Platform, you’ll also be able to: 

• Track multi-currency customer balances
• Track your own bank, payment service provider (PSP), and liquidity provider balances
• Store your customer and payee data securely and access it over API
• Get payment and balances analytics & dashboards
• Import your FX trades to automate your entire business, if you also trade FX 

To learn more about Kooltra's approach to FINTRAC reporting and how it can revolutionize your compliance workflows and business growth, schedule a strategy call with our team today.

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