CRM2 is a regulatory initiative designed to provide investors with greater visibility into investment performance and costs. It brought with it a plethora of systemic changes that must be implemented. These included pre-trade disclosure and verbal discussions on fees and other costs, and written post-trade disclosure for debt security transactions including the annual yield as well as the total dollar compensation. Further, the regulation mandated fund companies enhance their clients’ account statements to show information such as market value of fund, opening balance, and funds carrying Deferred Sales Charge (DSC).
To ensure that Unitrax® is compliant with CRM2, we worked very closely with our clients to identify functionalities that are relevant to their business process needs. LTI Canada’s compliance team also participated in many industry group discussions around CRM2 to get clarity on various aspects of the regulation.
Unitrax® has continuously been enhanced to ensure it complies on an annual basis with the timelines set out by the CRA and the Department of Finance (DOF) since the inception of FATCA in Canada. The platform automatically recognizes the line of business being administered and reports the correct information to the CRA through XML filing. Unitrax® has in-built functionalities to generate reports on configurable amounts, account types, and investor types, and also keeps track of changes in circumstances.
The Organization for Economic Co-operation and Development (OECD) developed the Common Reporting Standard (CRS) to combat global tax evasion and improve tax compliance. The CRS became effective in Canada on July 1, 2017, requiring financial institutions to provide customer information to the CRA that includes account holder’s personal details, TIN, account details, and payments credited to the account for account holders that met the CRS residence criteria.
LTI Canada has incorporated various changes in Unitrax® across functions like due diligence, administration, and reporting to comply with the CRS. Our compliance team actively participates in industry forums to discuss the implications of the CRS and best practices for superior compliance.
Unitrax® supports both segregated fund policies and mutual fund accounts, and contains configuration rules to allow you to determine the types of funds and the rules to be configured. The offering encompasses modules that strictly adhere to the different legislative, regulatory and business rules for each product while providing added flexibility that allows clients to issue customized plans for their market.