Money service businesses (MSBs) in Canada are required to comply with regulations under the Proceeds of Crime (Money Laundering) and Terrorist Financing Act (PCMLTFA). One of the things mandated by the law is MSB registration under the Financial Transactions and Reports Analysis Centre of Canada (FINTRAC) for legal compliance.
If you are setting up a new MSB or payment service business, learning the MSB registration process will help you. Fortunately, you don't have to look far for the information. Explore our step-by-step guide to the MSB registration process in Canada below.
What is MSB Registration?
The FINTRAC MSB registration process is an official step that money service businesses must take to operate legally. All reporting entities are required to complete the registration process and wait for approval before offering money-related services to customers.
Having an active FINTRAC MSB registration is essential for compliance with the PCMLTFA. Businesses that don't adhere to Canadian compliance requirements expose themselves to different consequences. These may be administrative penalties, operational restrictions, criminal penalties, and other enforcement actions.
How to Register MSB Canada: Step-by-Step MSB Registration Process
Learning how to register MSB Canada is the first step to meeting Canadian compliance requirements. Let's look at the complete MSB registration process in detail:
Fill out the Pre-Registration Form
All MSBs in Canada are required to submit a pre-registration form to FINTRAC. This document is an official request to register as a money service business or a foreign money service business (fMSB). FINTRAC will review the request, and its compliance officer will contact you by email to provide you with the official MSB registration form.
Ensure all information you provide on the pre-registration form is accurate and up-to-date. Providing false and misleading information will cause FINTRAC to reject the initial request. You'll have to refill and resubmit the pre-registration form with accurate information for another review.
Complete the MSB FINTRAC Registration Form
Once you receive the FINTRAC MSB registration form, you must fill out the following information:
- Bank account details
- Compliance officer details
- Current no. of employees
- Incorporation details (if applicable)
- Business owner and senior management information
- Estimate of the total amount of transactions per year (in Canadian dollars) for each service
- Information on MSB location, agents, and mandataries
FINTRAC also requires MSBs to perform criminal record checks for their chief executive officers, presidents, directors, and other individuals who hold 20% or more of the business (directly or indirectly). If you operate the business alone, you must submit criminal check information on yourself.
Confirming the existence of your MSB is also a mandatory part of how to register MSB Canada. Missing any step will cause you to submit an incomplete registration form, which can lead to delays or rejection.
Submit the MSB FINTRAC Registration Form
After reviewing your FINTRAC MSB registration form thoroughly, you must submit it using the appropriate steps. FINTRAC compliance officers always send a secure Canada Post Connect message during the registration process to applicants.
You must use this message to submit your completed registration form and any other required information. The agency will review your request and may send you an approval notice with registration number, a clarification request, or a denial/revocation decision with its reason.
Once registration is approved, you must keep the date in mind because it will have to be renewed every two years.
What Happens If You Operate Without MSB FINTRAC Registration?
Operating without an active FINTRAC MSB registration is illegal in Canada. If your business does not have a registration or is operating with an expired or revoked registration, your MSB will be exposed to FINTRAC penalties. These may include:
- Administrative monetary penalties for individuals or entities
- Tax liabilities
- Legal charges
- Shutdown of business or temporary halt of operations
The easiest way to avoid these non-compliance consequences is by registering your MSB with FINTRAC before starting operations. You must also develop a strong anti-money laundering (AML) compliance program and implement it immediately when registering MSB Canada.
FAQs
Is MSB FINTRAC Registration Mandatory in Canada?
Yes, FINTRAC MSB registration is mandatory and free for all money service businesses to fulfill Canadian compliance requirements. MSBs are one of the reporting entities mentioned under the PCMLTFA, which means they must follow FINTRAC's regulatory requirements.
Who Needs to Learn How to Register MSB Canada?
Money service businesses, payment service providers (PSPs), and crypto exchanges must learn how to register as MSB Canada. An active registration is mandatory at the federal level before starting operations. MSBs in Quebec must also apply for Revenu Quebec MSB registration to complete additional provincial requirements.
What is the MSB Registration Process for Foreign MSBs?
The fMSB registration process is similar to the registration process for regular MSBs. You must submit a pre-registration form, complete a registration form, and submit the form through a secure Canada Post Connect message.
How long does FINTRAC MSB Registration take?
The FINTRAC MSB registration process can take five to six months for businesses with thorough applications. Sometimes MSB applications may take a long time if your form contains inaccurate or incomplete information.
How can a Fintech Advisor Help with the MSB Registration Process?
A fintech advisor can submit a pre-registration form request on your behalf, draft and review your MSB registration form, and submit the final form to FINTRAC. Professional advisors help MSBs avoid errors in their registration forms and enhance the chances of MSB registration approval.
Worried About How to Register MSB Canada: Partner With Renno & Co. Fintech for Legal Assistance
Learning how to register MSB Canada may seem complex, but it doesn't necessarily have to be. At Renno & Co. Fintech, we can assist you with the FINTRAC MSB registration form by filling out the form on your behalf or reviewing your already filled form before submission.
Our team will ensure your application is error-free, complies with the latest regulations, and provides complete information to FINTRAC. Contact us today to speak to our legal advisor and start your Canadian MSB registration process immediately.
Disclaimer: This content is for informational purposes only and does not constitute legal advice.
