PCMLTFA

Test yourself

Two real CIRE-bank questions on this exact outcome. Click to reveal the answer and the rule citation.

1. 1

   A compliance officer at a dealer member reviews a client's account and notices a series of deposits just below $10,000 made on consecutive days, followed by a wire transfer abroad to a jurisdiction with limited AML oversight. Which PCMLTFA concept best describes this pattern?

   Outcome 6.2 · click for answer

   A.Structuring, splitting transactions to dodge reporting thresholds, a criminal offence under the PCMLTFACorrect

   B.Normal account activity across banking relationships, generating no reporting obligation at all

   C.A large cash transaction report requirement, since the total deposited surpasses the $10,000 mark

   D.A politically exposed person matter, requiring enhanced due diligence on the client's status

   Structuring refers to the deliberate practice of breaking up transactions that would otherwise meet or exceed reporting thresholds to avoid those reports. Under the PCMLTFA, structuring is itself a criminal offence, not merely a reporting trigger. The pattern described, sub-threshold deposits on consecutive days followed by international wire transfers, is a textbook indicator of structuring and layering in a classic money laundering typology. The compliance officer would be obligated to assess whether a Suspicious Transaction Report is warranted.

2. 2

   An employee of a CIRO dealer member believes that activity in a client account may constitute a violation of UMIR 2.2. Under UMIR 10.16, what is the threshold that triggers the employee's obligation to report?

   Outcome 6.2 · click for answer

   A.The employee must generally be certain a violation occurred before any report is made

   B.The employee need only reasonably believe the activity may be a violation and report forthwithCorrect

   C.The obligation generally arises only once a formal written complaint is filed by another participant

   D.Only officers and directors generally carry this duty, so front-line employees are exempt

   UMIR 10.16(1) applies to all officers, directors, partners, and employees of a Participant. The reporting threshold is intentionally low; belief that activity 'may be a violation.' The employee does not need to determine that a violation has definitely occurred; a reasonable belief that one may have occurred is sufficient. The report must be made 'forthwith'; without delay. Requiring certainty before reporting would undermine the gatekeeper framework, since employees rarely have all information needed for a definitive conclusion.

Related terms in Compliance

• Client Focused Reforms (CFR)

  The 2021 CSA reforms that rewrote suitability, KYC, and conflicts of interest.

• FINTRAC

  Canada's federal anti-money-laundering and anti-terrorist-financing agency.

• OBSI (Ombudsman for Banking Services and Investments)

  Independent dispute-resolution body for client complaints escalated after the dealer's internal process.

• Large Cash Transaction Report (LCTR)

  Mandatory FINTRAC report for cash transactions of $10,000 CAD or more.

• Suspicious Transaction Report (STR)

  Mandatory FINTRAC report when reasonable grounds exist to suspect money laundering or terrorist financing.

• Politically Exposed Person (PEP)

  A senior political or government official whose accounts require enhanced AML measures.