Money services businesses (MSBs)

If you do not have a place of business in Canada, see Foreign money services businesses.

If you are unsure, see The difference between money services businesses and foreign money services businesses.

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, knowing your clients, and having a compliance program. To begin the MSB registration process, please complete and submit the Pre-registration form(This will open a new window).

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 for another (for example, exchanging USD for CAD).

However, purchases made with foreign currency are not considered a foreign exchange. For example:

  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 entity to another using an electronic funds transfer network or any other method such as Hawala, Hundi, Fei ch'ien, and Chitti.

Issuing or redeeming money orders, traveller's cheques or anything similar

— Your business issues or redeems money orders, travellers' cheques or other similar negotiable instruments.

ISSUING
To offer your own business's money orders or travellers cheques.
REDEEMING
To repurchase your own business's money orders or traveller's cheques by returning the purchase price to the buyer.
SELLING OR CASHING
To exclusively sell or cash the money orders or traveller's cheques of another business that issued the money order or traveller's cheque, does not make you an MSB.

— This does not include cashing cheques made out to a particular individual or entity.

Dealing in virtual currency (coming into force June 1st, 2020)

— This includes both virtual currency exchange and virtual currency transfer services.

  1. Virtual currency exchange services include exchanging:
    • funds for virtual currency,
    • virtual currency for funds or,
    • virtual currency for another virtual currency.

  2. Virtual currency transfer services include:
    • transferring virtual currency at the request of a client or,
    • receiving a transfer of virtual currency for remittance to a beneficiary.
FINTRAC is allowing Money Services Businesses (MSB) dealing in virtual currency to voluntarily register in advance of June 1st, 2020, when registration will be mandatory. Please note that if you are exclusively dealing in virtual currency, as of June 1st, 2020, you have obligations under the PCMLTFA and associated Regulations as an MSB.

You are also considered a money services business if:

Who is not a money services business (MSB)?

You are not an MSB if:

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 ABC Investment Advisors Inc. is carrying out the MSB activity in the course of providing investment services as a securities dealer.

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 FINTRAC. 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 financing offence, you must submit a suspicious transaction report (STR). The following STR guidance trilogy explains how to identify and report STRs and all three should be read together. See What is a suspicious transaction report?, Reporting suspicious transactions to FINTRAC and Money laundering and terrorist financing indicators - Money services businesses.

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 disclose this information to the Royal Canadian Mounted Police (RCMP) and the Canadian Security Intelligence Service (CSIS) and submit a Terrorist Property Report to FINTRAC without delay. See Guideline 5: Submitting Terrorist Property Reports.

Large cash transactions: When you receive $10,000 CAD or more in cash (including taxes or other fees) 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 or by fax at 1-866-226-2346.

Record keeping

You are responsible for keeping certain 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, or incur penalties or other consequences.

Glossary

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

Date Modified: