What is an Canadian MSB?
To become a Money Services Business (MSB) and offer financial services in the Canadian market, you need to register with the Financial Transactions and Reports Analysis Centre of Canada (FINTRAC).
As set out in the Proceeds of Crime (Money Laundering) and Terrorist Financing Act (PCMLTFA), an MSB registration enables you to offer services such as:
Foreign exchange dealing (conducting transactions where you exchange one currency for another).
Money transferring (transferring funds from one person or entity to another using an electronic funds transfer network or any other method).
Issuing or redeeming money orders, traveller’s cheques, or similar negotiable instruments.
Dealing in virtual currencies (including virtual currency exchange and transfer services).
If you are a business that does not have a physical place of business in Canada but provides these services to clients in Canada, you must register as a Foreign Money Services Business (FMSB).
Registration is a mandatory legal requirement, and operating without a valid FINTRAC registration can result in significant penalties. Once registered, you must also implement a comprehensive compliance program, including the appointment of a compliance officer, the development of written policies, and ongoing training for staff.
What do I need to get a Canadian MSB licence?
Below are the requirements:
Business Incorporation & Structure
– Legal Entity: You must have a registered Canadian corporation (Federal or Provincial).
– Business Number: A valid 9-digit Business Number (BN) issued by the Canada Revenue Agency (CRA).
– Physical or Foreign Status: You must determine if you are a Domestic MSB (with a physical Canadian office/staff) or a Foreign MSB (no physical presence but targeting Canadian clients).
– Ownership Details: Full names, addresses, and dates of birth for every individual who owns or controls 20% or more of the business.
Personnel Requirements
– Compliance Officer:
– Clean Criminal Record: All owners (20%+)
The “Five Pillars” Compliance Program
You cannot operate without a documented compliance framework, which includes:
– Written Policies and Procedures: A manual detailing how your business will prevent money laundering and terrorist financing.
– Risk Assessment: A documented analysis of the risks your business faces based on its clients, services, and geographic locations.
– Training Program: A written plan and records showing that all employees are regularly trained on AML obligations.
– Effectiveness Review: A commitment to conduct a formal audit of your program every two years.
– Know Your Customer (KYC): Established procedures for verifying client identities (mandatory for transactions of $1,000 CAD or more).
Registration Information
When applying through the FINTRAC MSB Registration System (FMRS), you must provide:
– Bank Account Details: Information about the Canadian financial institution where you hold your business operating accounts.
– Service List: A clear breakdown of which MSB services you offer (e.g., Forex, Crypto dealing, Money transferring).
– Estimated Transaction Volume: Your expected annual transaction dollar amount for each service type.
– Agent Information: If you use agents to provide services on your behalf, you must list their full details and verify their eligibility.
Retail Payments Registration (If Applicable)
Bank of Canada (RPAA): If your MSB acts as a Payment Service Provider (PSP)—for example, by maintaining accounts for users or facilitating electronic fund transfers—you may also need to register with the Bank of Canada under the Retail Payments Activities Act.
How long does it take to get a Canadian MSB Liscence?
Normally the application takes around 4-6 weeks to prepare, faster if your can provide all the information promptly. The processing time is highly variable and could be from 3-12 months.
What if I want to become authorised sooner?
If you cannot wait until your licence is issued, you have a couple of options:
You can buy an existing firm – we do a lot of work with M&A transactions – contact us for more detail
You can become an agent of an authorised firm
Will I be accepted for an Canadian MSB?
To protect your time and maintain our 99% approval track record, our process begins with a rigorous pre-qualification check. We verify that your firm and its key stakeholders meet all FINTRAC standards before we move forward with your case.
How much does it cost?
We charge a flat fee for an application, and include unlimited follow up work.
Why choose us?
With a 99% success rate, we handle the complexities of FINTRAC so you don’t have to. Our expert pre-screening ensures your application is right the first time, protecting your time and guaranteeing a seamless path to Canadian market entry.
