The regulation requires companies in the investment industry (such as banks and other financial institutions) to determine whether they hold assets for people engaged in prohibited activities – such as attending demonstrations aimed at preventing trade or interfere with critical infrastructure – and stop providing financial. services or transactions for these people.
The rules also require online fundraising platforms that deal in both cryptocurrency and traditional currency — as well as payment processors — to record and report transactions to the federal anti-money laundering agency, the Center for Analysis and Reporting of Financial Transactions (FINTRAC).
While the intent of the emergency order is clear at this stage, its practical application is not.
According to industry sources, companies probably want to be clear about who is covered by the order and whether they are legally protected when they comply with their requirements.
Laura Paglia, president and CEO of the Investment Industry Association of Canada (IIAC), said the industry trade group has yet to receive requests for help from companies to comply with the measures, but that it is “ready to work with them in case of problems”. arises”.
The Investment Industry Regulatory Organization of Canada said in a statement that it requires its trader members to comply with “all appropriate laws.”
“We are working to gather more information about the operational implications of the Emergency act for our brokerage firms ,” the press release says.
The Canadian Bankers Association announced in a press release that, like other financial service providers, banks must “diligently implement the required measures.”
“Banks in Canada follow all applicable laws and regulations in the conduct of their business, consistent with their commitment to protect the integrity of the Canadian financial system,” the association said.
Major Canadian banks have so far declined to comment individually and refer to the CBA statement.
The emergency orders directed to financial institutions to suspend their services to customers, individuals and companies, which they suspect of contributing to the blocks.
They also require institutions to exercise due diligence to identify accounts linked to the protests, and to disclose to the RCMP or CSIS any property or transactions they have identified as belonging to or controlled by those designated.
Banks have received civil liability protection for actions taken in accordance with the orders.
In a media briefing on Wednesday, senior government officials said they were in talks with financial institutions to enforce the order.
Asked if the financial institutions were given advice on who to target, officials said it was up to the institutions to do their due diligence, but it would make sense to focus on them first. to limit the funding of demonstrations.
To obtain the release of financial accounts, either because a person has stopped protesting or because of mistaken identity, officials said that those concerned should contact their financial institutions, which will then validate the information and take the necessary measures .
On the insurance side, the orders apply only to auto insurance. The Insurance Commission of Canada recently said that the association and its members will work with the federal government to determine how best to implement the order.