FINTRAC AML Requirements Explained: What Real Estate, Mortgage & MSB Firms Must Do to Comply
Canada’s anti-money-laundering framework places concrete obligations on a wide range of businesses, from money services companies and banks to real estate brokers, mortgage brokers, and dealers in precious metals. Understanding what FINTRAC requires, and why, will help regulated businesses reduce legal risk and operate with confidence.
The principle: identify, assess, report
FINTRAC’s supervisory approach is rooted in three core tasks for reporting entities: identify clients and beneficial owners, assess risk and activity, and submit required reports when thresholds or suspicions occur. That framework underpins specific obligations for KYC, recordkeeping, enhanced due diligence for higher risk relationships, and transaction reporting.
Know Your Client (KYC) and timing to verify
Different sectors have different timing rules for identity verification. In general, you must identify clients and, where required by sectoral guidance, verify identity before certain transactions settle or when prescribed triggers occur. FINTRAC’s guidance lays out the timing expectations and methods you can use to verify identity, including documentary and non-documentary methods as appropriate for the risk.
Beneficial ownership and corporate clients
For corporate clients or entities, reporting entities must identify and take reasonable measures to verify beneficial owners. The beneficial ownership rules aim to ensure transparency of who ultimately controls or benefits from an account or transaction; this is essential for risk assessment and for filing accurate reports. FINTRAC guidance explains the levels of ownership and control to consider.
Transaction reporting: STRs, LCTRs and more
Reporting entities must file various reports to FINTRAC. Two of the most commonly asked about are:
Suspicious Transaction Reports (STRs): There is no minimum monetary threshold for an STR. If you reasonably suspect money-laundering or terrorist financing, you must submit an STR “as soon as practicable.” FINTRAC provides form guidance and examples; industries like real estate have sector-specific indicators to help spot suspicious activity.
Large Cash Transaction Reports (LCTRs): For cash transactions above reporting thresholds (e.g., $10,000 CAD in cash), regulated entities must file the prescribed report. (See FINTRAC’s reporting directives for exact thresholds and definitions applicable to your sector.)
Enhanced due diligence and PEPs
For higher-risk relationships, for example, politically exposed persons (PEPs) or relationships involving high-risk jurisdictions, FINTRAC expects reporting entities to apply enhanced due diligence. That includes obtaining additional information on the source of funds, closer transaction monitoring, and documenting the rationale for continuing or declining a relationship.
Policies, training and recordkeeping
An effective compliance program must include written policies and procedures, a designated compliance officer, and training for employees and contractors. Recordkeeping obligations are strict: keep client identity records and transaction records for prescribed periods, and make them available for inspection if FINTRAC requires. These program elements are the foundation of any successful AML program.
Sector considerations: real estate & mortgage brokers
Real estate and mortgage professionals have been singled out as high-risk sectors due to the size and opacity of real estate transactions. FINTRAC issues sector-specific guidance and indicators for real estate brokers and developers and requires STRs when suspicious activity is detected. Mortgage brokers should similarly ensure their KYC and source-of-fund checks align with FINTRAC guidance.
Good compliance practice (practical checklist)
Map your customer journeys to identify points where KYC must occur.
Implement risk-based policies and document risk decisions.
Train frontline staff to escalate red flags immediately.
Use automated monitoring for transaction patterns; keep human review for nuance.
Conduct periodic independent testing (an effectiveness review or audit).
Why staying current matters
FINTRAC is modernizing and updating reporting rules and forms; recent and upcoming amendments (including changes that came into force in 2025) affect reporting content and timelines. Regulators are also under scrutiny and are moving toward stronger enforcement tools. Staying current with FINTRAC guidance reduces exposure to enforcement and reputational risk.
Complying with FINTRAC is not only a legal requirement , it’s a risk management practice that protects your business and customers. If your firm needs a tailored AML program, a gap assessment, or help converting FINTRAC guidance into workable policies, Platino Consulting produces templates, trains staff, and prepares you for examinations or audits.
