Money services businesses (MSBs)

If you are a money services business (MSB), you need to know about all the obligations that apply to you. This includes registering your business with us, reporting to us, keeping records, identifying your clients, and having a compliance program. To begin the MSB registration process, please complete and submit the Pre-registration form.

Who is a money services business (MSB)?

You are an MSB if you are in business in Canada to offer any of the following services to the public:

Foreign exchange dealing

- Conducting transactions where you exchange one type of currency (USD$ for CAD$) for another.

See examples where purchases made with foreign currency are not considered a foreign exchange.

  1. Diana pays for gas and a chocolate bar using a $100 US bill. She asks that her change be given to her in Canadian dollars. This would not be considered a foreign currency exchange transaction.
  2. Esther pays for a $20 book using a $50 US bill and a $50 US traveller's cheque. She asks that her change be given to her in Canadian dollars. The change given for one of the $50 is not considered foreign currency exchange. However, the amount given for the other $50 would be considered a foreign currency exchange.
Money transferring

- Transferring funds from one individual or organization to another using an electronic funds transfer network or any other method such as hawala, hundi, fei ch'ien, and chit.

Cashing or selling money orders, traveller's cheques or anything similar

- This may also include cashing or selling traveller's cheque or anything similar. This does not include cashing cheques made out to a particular individual or organization.

Who is not a money services business (MSB)?

You are not an MSB if:
  • You offer one or more MSB services strictly as an agent for an MSB. It is the MSB for which you are an agent that has to register with us.
  • You offer one or more MSB services as part of other activities for which you are a reporting entity.

See examples of who is not an MSB.

  1. Darren transfers funds as an agent of Money Transfer Inc. He also uses Money Transfer Inc.'s sign to advertise. Although Darren offers and advertises this service, he is not an MSB. It is Money Transfer Inc. that is the MSB.
  2. A securities dealer from ABC Investment Advisors Inc. receives funds from his client in Euros to buy Canadian securities. Although one type of money is exchanged for another, this would not be considered an MSB service because the securities dealer's activities are already covered under his obligations as a reporting entity.

Your requirements

Register your money services business (MSB)

Before beginning to operate in Canada, you must register your money services business (MSB) with FINTRAC. Even if you are registered as an MSB with a province or territory, you still have to register with us. For all your MSB registration obligations, see Register your money services business.

Compliance program

A comprehensive and effective compliance program is the basis of meeting all of your obligations under the PCMLTFA and associated Regulations. During a FINTRAC examination, it is important to demonstrate that the required documentation is in place and that employees, agents, and all others authorized to act on your behalf are well trained and can effectively implement all the elements of your compliance program. A senior officer must approve the compliance program and the compliance officer must have the necessary authority to carry out the requirements of the program. You must:

See Compliance program requirements, the Risk-based approach guide and the Risk-based approach workbook for MSBs for more information on these obligations.

Know your client

As a money services business, you must verify the identity of clients for certain activities and transactions according to the Proceeds of Crime (Money Laundering) and Terrorist Financing Regulations (PCMLTFR). Part of knowing your client includes following the methods to identify clients, as well as conducting certain additional activities as listed below:

Reporting

Money services businesses are required to complete reports about certain transactions and property and submit them to FINTRAC. Financial transaction reports are critical to FINTRAC’s ability to analyze transactions in order to develop financial intelligence that is disclosed to law enforcement and partner agencies. Therefore, the quality of your reporting will be reviewed by FINTRAC in examinations.

Suspicious transactions:  Within 30 days of determining that there are reasonable grounds to suspect that a transaction or an attempted transaction is related to the commission or attempted commission of a money laundering or terrorist activity financing offence, you must submit a report. See Guideline 2: Suspicious transactions, Guideline 3A: Submitting Suspicious Transaction Reports to FINTRAC electronically and Guideline 3B: Submitting Suspicious Transaction Reports to FINTRAC by paper.

Terrorist property:  When you know that property in your possession or under your control is owned, controlled by or on behalf of a terrorist or a terrorist group, you must submit a report. You must also submit a report to the Royal Canadian Mounted Police (RCMP) and the Canadian Security Intelligence Service (CSIS). See Guideline 5: Submitting Terrorist Property Reports.

Large cash transactions:  When you receive $10,000 CAD or more in cash either in a single transaction or in multiple transactions within a 24-hour period, you must submit a report within 15 calendar days. See Guideline 7A: Submitting Large Cash Transaction Reports to FINTRAC electronically and Guideline 7B: Submitting Large Cash Transaction Reports to FINTRAC by paper.

Electronic funds transfers:  When you send or receive client-initiated instructions to transfer $10,000 CAD or more internationally; either in a single transaction or in multiple transactions within a 24-hour period, you must submit a report within 5 business days. See Guideline 8A: Submitting non-SWIFT Electronic Funds Transfer Reports to FINTRAC electronically, Guideline 8B: Submitting SWIFT Electronic Funds Transfer Reports to FINTRAC and Guideline 8C: Submitting non-SWIFT Electronic Funds Transfer Reports to FINTRAC by paper.

If you have a computer and an internet connection, you must submit all reports to FINTRAC electronically, except Terrorist Property reports, which can only be submitted on paper.

Record keeping

You are responsible for keeping certain transaction and client identification records. These records are to be kept in such a way that they can be provided to FINTRAC within 30 days if required to do so. See Record keeping for money services businesses for details.

If you do not meet all of these obligations, you may be assessed penalties or incur other consequences.

Glossary

FINTRAC has created a Guidance glossary that defines certain terms used throughout its guidance documents.

Definitions

Administrative monetary penalties (AMPs)

Civil penalties that may be issued to reporting entities by FINTRAC for non-compliance with the PCMLTFA and related regulations. (pénalité administrative pécuniaire [PAP])

Affiliate

An entity is affiliated with another entity if one of them is wholly owned by the other, if both are wholly owned by the same entity or if their financial statements are consolidated. (entité du même groupe)

Branch

A branch is a part of your own business at a distinct location other than your main office. (succursale)

Clarification Request

A clarification request is a method used to communicate with you when we need more information about your registration form. This request is usually sent to you by email. If you do not reply to a clarification request, your registration can be denied or revoked. (demande de precisions)

Compliance officer

The individual you appoint to be responsible for the implementation of your compliance regime. Your compliance officer should have the authority and the resources necessary to discharge his or her responsibilities effectively. Depending on your type of business, your compliance officer should report, on a regular basis, to the board of directors or senior management, or to the owner or chief operator. (agent de conformité)

Credit card acquiring business

A credit card acquiring business is a financial entity that has an agreement with a merchant to provide the following services:

  • enabling a merchant to accept credit card payments by cardholders for goods and services and to receive payment for credit card purchases;
  • processing services, payment settlements and providing point-of-sale equipment (such as computer terminals); and
  • providing other ancillary services to the merchant. (entreprise d’acquisition de cartes de crédit)
Current

A document or information that is up to date (the most recent) and is not expired. (document ou renseignement à jour)

Electronic Funds Transfer (EFT)

An electronic funds transfer (money transfer) means the transmission of instructions for the money transfer of funds to or from Canada. An electronic funds transfer does not include the instructions for the money transfer of funds from one place in Canada to another in Canada. (télévirement)

Entity

Can be a corporation, trust, partnership, fund, or an unincorporated association or organization. (entité)

Financial account

Refers to deposit, credit card or other loan accounts held by a financial entity. This does not include investment accounts such as Registered Retirement Savings Plans (RRSPs). (compte financier)

Financial entity

Means a bank that is regulated by the Bank Act, an authorized foreign bank, as defined in section 2 of that Act, in respect of its business in Canada, a cooperative credit society, savings and credit union or caisse populaire that is regulated by a provincial Act, an association that is regulated by the Cooperative Credit Associations Act, a financial services cooperative, a credit union central, a company that is regulated by the Trust and Loan Companies Act and a trust company or loan company that is regulated by a provincial Act. It includes a department or an entity that is an agent or mandatary of Her Majesty in right of Canada or of a province when it is carrying out an activity referred to in section 45 of the Proceeds of Crime (Money Laundering) and Terrorist Financing Regulations. (entité financière)

Guarantor

A guarantor can be:

  • a medical doctor, chiropractor, or dentist;
  • a judge, a magistrate or lawyer;
  • a notary (in Quebec) or a notary public;
  • an optometrist or a pharmacist;
  • an accredited public accountant or Chartered Professional Accountant;
  • a professional engineer (P. Eng., in a province other than Quebec) or engineer (Eng. in Quebec); or,
  • a veterinarian. (répondant)
Independent

For the purposes of ascertaining client identity, the term “independent” means that the sources must be different; the information cannot be from the same issuer. (source indépendante)

Individual or person

A human being. (individu ou personne)

Institutional trust

An institutional trust is a trust that is established by a corporation, partnership or other entity for a particular business purpose and includes pension plan trusts, pension master trusts, supplemental pension plan trusts, mutual fund trusts, pooled fund trusts, registered retirement savings plan trusts, registered retirement income fund trusts, registered education savings plan trusts, group registered retirement savings plan trusts, deferred profit sharing plan trusts, employee profit sharing plan trusts, retirement compensation arrangement trusts, employee savings plan trusts, health and welfare trusts, unemployment benefit plan trusts, foreign insurance company trusts, foreign reinsurance trusts, reinsurance trusts, real estate investment trusts, environmental trusts and trusts established in respect of endowments, foundations and registered charities. (fiducie institutionnelle)

Inter vivos trust

A trust that is not created by will. This type of trust is established by a living individual for the benefit of another individual, such as a trust created by a parent for a child (also known as a living trust). Its assets can be distributed to the beneficiary during or after a settlor’s lifetime. (fiducie entre vifs)

Listed person

A listed person includes an individual, a corporation, a trust, a partnership or fund or an unincorporated association or organization that is believed to:

  • have carried out, attempted to carry out, participated in or facilitated a terrorist activity; or
  • be controlled directly or indirectly by, be acting on behalf of, at the direction of, or in association with any individual or entity conducting any of the above activities.

A listed person means anyone on a list published in the Regulations Implementing the United Nations Resolutions on the Suppression of Terrorism issued under the United Nations Act. You can consult that list of names on the Office of the Superintendent of Financial Institutions' Web site: http://www.osfi-bsif.gc.ca/Eng/fi-if/amlc-clrpc/atf-fat/Pages/default.aspx. (personne inscrite)

Money Laundering Offence

A money laundering offence involves various acts committed with the intention to hide or convert dirty money produced through criminal activity into clean money whose criminal origin is hard to trace. Criminals are always looking for ways to exchange, disguise or move money around to hide its origin. The dirty money can come from offences such as drug trafficking, bribery, fraud, forgery, murder, robbery, counterfeit money, stock manipulation, tax evasion, and copyright infringement. Dirty money can also come from illegal activities that took place outside of Canada. (infraction de recyclage des produits de la criminalité)

Money service business agent

An MSB services agent is an individual or organization authorized to act on an MSB's behalf. Do not mistake an MSB agent with a branch. If you are an MSB, an agent is a separate individual or organization that you authorize to deliver your services. If you use one or more agents to deliver your MSB services on your behalf, you need to give information about all of them in your registration form. It is your responsibility to keep your agent information up to date in your registration information. If you are an agent of an MSB, you do not have to register with us for the services you deliver for that MSB. (mandataire d’une entreprise de services monétaires)

Organization

An organization is an entity such as a corporation, a trust, a partnership, or an association. It does not include an individual. (organisation)

Original

Original refers to any paper or electronic document as it is sent from the issuer directly to the client. (version originale d’un document)

Public body
  1. any department or agent or mandatary of Her Majesty in right of Canada or of a province;
  2. an incorporated city or town, village, metropolitan authority, township, district, county, rural municipality or other incorporated municipal body in Canada or an agent or mandatary in Canada of any of them; and
  3. an organization that operates a public hospital and that is designated by the Minister of National Revenue as a hospital authority under the Excise Tax Act, or an agent or mandatary of such an organization (organisme public).
Reliable

In reference to a source, reliable means that the source is well known, reputable, and is considered one that you trust to verify the identity of the client. (source fiable)

Senior officer

A senior officer of an organization can be:

  • a director who is also a full time employee;
  • a chief executive officer, chief operating officer, president, secretary treasurer, controller, chief financial officer, chief accountant, chief auditor or chief actuary, or any individual who performs these similar duties; or,
  • any other officer who reports directly to the board of directors, chief executive officer or chief operating officer. (cadre dirigeant)
Service agreement

A service agreement is an agreement between you and another organization for you to provide any of the following MSB services:

  • money transfers;
  • foreign currency exchange; or
  • money orders, traveller's cheques or anything similar. (accord de relation commerciale)
Settlor

A settlor is an individual or entity that creates a trust with a written trust declaration. The settlor ensures that legal responsibility for the trust is then given to a trustee and that the trustee is provided with a trust instrument document that explains how the trust is to be used for the beneficiaries. A settlor includes any individual or entity that contributes financially to that trust, either directly or indirectly. (constituent)

Source

The issuer or provider of information or documents for verifying identification. (source)

SWIFT

The Society for Worldwide Interbank Financial Telecommunication (SWIFT) network is a global member-owned cooperative and an international provider of secure financial messaging services. (SWIFT)

Terrorist activity financing offence

A terrorist financing offence is knowingly collecting or giving property (such as money) to carry out terrorist activities. This includes the use and possession of any property to help carry out the terrorist activities. The money earned for terrorist financing can be from legal sources, such as personal donations and profits from a business or charitable organization. The money can also come from criminal sources, such as the drug trade, the smuggling of weapons and other goods, fraud, kidnapping and extortion. (infraction de financement des activités terroristes)

Trust

A right of property held by one individual or entity (a trustee) for the benefit of another individual or entity (a beneficiary). (fiducie)

Trustee

A trustee is the individual or entity authorized to hold or administer the assets of a trust in the best interests of the beneficiary. (fiduciaire)

Valid

Refers to a document or information that appears legitimate or authentic and does not appear to have been altered or had any information redacted. The information must also be valid according to the issuer, for example if a passport is invalid because of a name change, it is not valid for FINTRAC purposes. (document ou renseignement valide)

Verify client identity

To refer to certain information or documentation to identify a client and ensure that their information matches what you know about them. (vérifier l’identité d’un client)

Very Large Corporation

A large corporation is one that has minimum net assets of $75 million CAD on its last audited balance sheet. The corporation's shares have to be traded on a Canadian stock exchange or on a stock exchange outside Canada that is designated by the Minister of Finance. The corporation also has to operate in a country that is a member of the Financial Action Task Force (FATF). (personne morale dont l’actif est très important)

Working Days

A working day is a day between and including Monday to Friday. It excludes Saturday, Sunday, or a public holiday. (jour ouvrable)

Date Modified: