In February 2021, FINTRAC updated its guidance on politically exposed persons (PEP) and heads of international organizations (HIO), as well as related guidance for account-based reporting entity sectors, including “securities dealers” (i.e. dealers and advisors). This guidance comes into effect on June 1, 2021.
The fundamental obligation of a registrant to make a PEP and HIO determination remains unchanged. The new guidance adds additional specificity and clarity regarding the duration of being a PEP/HIO and who constitutes a family member or close associate of a PEP or HIO. It also sets out some exceptions to the requirement to make a PEP or HIO determination.
Prior to the new guidance taking effect in June 2021, registrants should reflect the revised guidance in their compliance manuals and review their account opening documents to ensure that the PEP and HIO questions accurately capture those who meet the definitions.
April 30, 2021