On October 24, 2012, the Minister of Finance and the Financial Consumer Agency of Canada (FCAC) announced the Prepaid Payment Products Regulations (Regulations). “Prepaid payment product” is defined as a payment card, whether physical or electronic, that is – or can be – loaded with funds and that can be used by the cardholder to make withdrawal (“prepaid card”). The Regulations will apply to prepaid cards that are issued in Canada by federally regulated financial institutions (FRFIs). The Regulations aim to protect prepaid card consumers by establishing rules that require information disclosures and limit business practices of issuing FRFIs. Consumer…
On October 13, 2012, the Department of Finance (DOF) released proposed amendments to the Regulations under the Proceeds of Crime (Money Laundering) and Terrorist Financing Act ("PCMLTFA") ("Amendments"). The DOF’s stated goal of the Amendments is to improve Canada’s compliance with the Financial Action Task Force’s (FATF) Recommendation 5 (recently reformulated as Recommendation 10), which deals with customer due diligence (CDD). The PCMLTFA is the basis for Canada’s anti-money money laundering (AML) and anti-terrorist financing (ATF) regime and applies to designated reporting entities (including Schedule I and II banks, foreign bank branches, trust companies and insurance companies). It establishes four…
A recent decision of the Divisional Court in Ontario, gives insight into further potential exposure to Public Companies for inadequate compliance controls. The Plaintiffs sought to bring a class action against IMAX, an issuer listed both on the TSE and NASDAQ Exchanges. The case involved the duty to make regular disclosure of information material to the company's business and affairs. IMAX overstated revenues in 2005 by taking into 2005 revenue payments that had not yet been made to IMAX under contracts IMAX had not yet performed fully. This created a problem because it was a change in the revenue recognition…
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