Have Fed ID, will sign: ID laws for new signing officers
Has your organization recently changed signing officers for the investment accounts? Is there an AGM on the horizon? Then there’s something you need to know.
The Proceeds of Crime (Money Laundering) and Terrorist Financing Act (the Act) is federal legislation enacted to “facilitate combatting the laundering of proceeds of crime and combatting the financing of terrorist activities, to establish the Financial Transactions and Reports Analysis Centre of Canada (FINTRAC) and to amend and repeal certain Acts in consequence”.
All financial institutions are subject to the legislation. What does this have to do with social housing? The majority of non-profits in Ontario have investments through Phillips, Hager and North Investment Services (PH&N).
Under the Act, the identity of all corporations and signing officers must be identified by the use of certain prescribed methods. The process is generally referred to as the collection of federal ID, or Fed ID. Corporate identification was verified, in the form of Articles of Incorporation, when the investment account was originally opened.
Provisions regarding individual signing officer ID are now being enforced. Public bodies and large corporations are exempt from having to provide Fed ID. Large corporations are defined as those with a minimum of $75M in net assets.
Ultimately, PH&N will need to collect Fed ID from a minimum of three signing officers in each nonprofit. However, the short-term focus is on providers that are introducing new signing officers to PH&N Investment Services through a Resolution of Directors.
Current signers, who have previously provided ID, do not have to provide it again.
What will happen if new signing officers have not undergone the Fed ID process?
For example, if a non-profit were to submit a Resolution of Directors (naming new signing officers) and place a trade (purchase or redemption) at the same time, the transaction may be halted if Fed ID has not been properly collected from the new officers whose signatures appear on the transaction documents.
PH&N has granted a two-month extension to the collection of Fed ID when there are new signers and a trade occurs. In other words, as long as a current Resolution of Directors is in place, unit holders may place a trade. They will be notified that they have two months during which to comply with the requirements. If not, the account may be suspended.
How do we satisfy these requirements?
There are a number of prescribed methods used for the collection of Fed ID. The most straightforward is for a representative of PH&N Investment Services to verify an individual’s identification via an in-person meeting. They will review an original identification document, such as a birth certificate, current driver’s license, or current passport. An Investment Funds Advisor is available to meet at PH&N Investment Services downtown Toronto office, Monday to Friday, from 8:00 a.m. to 5:00 p.m. Eastern Time. Please contact 1-888-771-7473 if you wish to arrange a meeting.
If it is not convenient or possible to meet face-to-face, the Federal ID Requirements – Replacement Authorized Signatory form (bit.ly/fedIDform), available on SHSC Financial’s website, lists additional options for the collection of Fed ID. A full description of the options is contained within the form. The original completed form should be mailed to PH&N Investment Services.
Your corporation will need to complete one Replacement Authorized Signatory form for each new signing officer. Please indicate the identity verification option you are choosing – either Option A or Option B.
If you require assistance in complying with these requirements, contact PH&N Investment Services at 1-888-771-7473 or John Osmond at SHSC Financial Inc. at email@example.com or 1-866-268-4451 x 237.