A politically exposed person (PEP) refers to someone with political relations either in Canada or internationally. This includes high-ranking government officials (at all levels of government), military personnel, ambassadors, and judges.
You would also be a PEP if you are the leader of an international organization, such as a global NGO. In this case, you would be classified as a Head of an International Organization (HIO), which holds the same implications as any other PEP.
Foreign and domestic politically exposed persons
Politically exposed persons can be considered foreign (outside of Canada) or domestic (within Canada).
The type of position held by a foreign PEP is the local equivalent of the positions listed above. The only difference is the country in which you hold this position. Foreign PEPs are considered politically exposed persons forever.
If you are a domestic PEP or HIO, you maintain this classification until 5 years after you step down from the position.
What are my responsibilities as a PEP?
When you sign up for an account with Wealthsimple, or any other reporting entity (such as a bank or other financial institution), you must disclose your PEP or HIO status.
You’ll also need to disclose the source of your income and savings. This includes funds from an inheritance, employment income, lottery winnings, or income from various types of investments (such as real estate or stock dividends).
What if I’m related to a PEP, but I am not a PEP myself?
It depends on your relationship to the PEP. If you have one of the following relationships to a PEP or HIO, you may be considered a politically exposed person yourself:
- A spouse or common-law partner
- A parent or child
- An in-law (parent of the spouse of a PEP)
- A sibling
- A close associate (including but not limited to: a business partner, romantic partner, someone who is a member of the same board of directors, political party, or union as the PEP/HIO, someone who has done charitable work with the PEP/HIO, or anyone listed on the same policy as the PEP/HIO)
How does this impact my experience at Wealthsimple?
If you are determined to be a politically exposed person, there will be certain measures taken with your account. Examples of these measures include:
- Asking you about the source of your wealth (how you accumulated your assets)
- Asking you about the source of your funds (where the money used to fund your accounts is coming from)
- Being subject to a higher level of ongoing screening
For more information, or to share information about your PEP/HIO status, please contact our customer support team.