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Navigating the Regulatory Waters: Licensing and Registration for Money Service Businesses in Canada


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Operating a money service business (MSB) like currency exchange, money transfer service, or crypto exchange can be an exciting entrepreneurial venture. However, it also comes with a host of regulatory requirements that must be properly fulfilled to keep the business compliant and avoid penalties. 

In Canada, there are two main regulatory requirements for MSBs – obtaining a provincial/territorial license and registering with the federal anti-money laundering watchdog, FINTRAC.

Provincial/Territorial Licensing

Each province and territory in Canada regulates MSBs differently. Generally, an MSB is defined as a business that exchanges fiat currency, deals in virtual currencies, remits or transfers funds, issues or redeems money orders, travelers’ checks or other similar instruments, or flows of money service business licence or payment instruments. To legally operate in a jurisdiction, an MSB must obtain the appropriate license from provincial/territorial regulators like a finance authority or consumer protection agency.

Key Licensing Requirements

Specific license requirements vary, but some common conditions include:

  • Submitting a license application with ownership, operations, AML, and reporting details
  • Paying licensing fees that can range from $100 to over $10,000 annually
  • Maintaining minimum capital reserves e.g. $25,000 to $100,000
  • Securing bonding requirements up to $10,000
  • Carrying appropriate insurance like commercial liability coverage
  • Filing periodic reports on transaction volumes, locations, agents, etc.
  • Undergoing audits & site visits by regulatory staff
  • Renewing the license annually before expiry

Some jurisdictions may also mandate submitting AML/CTF compliance manuals, training programs, and screening procedures for agents.

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Multi-Province Operations

For MSBs operating in multiple provinces/territories, separate licenses must be obtained for each jurisdiction. This allows regulators in each area to monitor local operations and enforce provincial laws.

Some exceptions exist. For example, FINTRAC MSB registration can operate elsewhere under a single license by registering with the other province. Some prairie provinces also have reciprocal licensing agreements. But in general, expect to apply for multiple provincial licenses.

Consequences of Non-Compliance

Operating without an appropriate license can lead to:

  • Cease and desist orders
  • Fines up to $100,000
  • License revocation
  • Legal action or prosecution
  • Inability to obtain a future license

Not having necessary provincial licenses can also affect federal FINTRAC registration (detailed next). It’s critical to understand each jurisdiction’s specific MSB licensing regime.

FINTRAC Registration

Apart from provincial licenses, MSBs must also register with FINTRAC MSB registration   – Canada’s anti-money laundering and terrorist financing regulator. FINTRAC operates under the federal Proceeds of Crime (Money Laundering) and Terrorist Financing Act.

Registration Requirements

To register, an MSB must:

  • File a registration application with corporate info, owners, locations, etc.
  • Pay a registration fee based on locations, revenue, or transactions
  • Designate a compliance officer to oversee AML/CTF policies
  • Implement a compliance regime with risk assessment, monitoring, and training
  • Maintain records on transactions, clients, policies, training, etc.
  • Report prescribed transactions, like amounts over $10,000, suspicious activities, etc.

FINTRAC registration applies even if already provincially licensed. Some jurisdictions may expedite licensing if the MSB has a FINTRAC registration.

Consequences of Non-Compliance

Operating without registering can lead to:

  • Fines between $1,000 to $500,000 per violation
  • Public naming by FINTRAC
  • Imprisonment up to 5 years for individuals
  • Loss of provincial licensing
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So both provincial licensing and federal FINTRAC registration are mandatory for launching and operating an MSB in Canada, aside from corporate registration, municipal permits, and other requirements.

Navigating the Regulatory Waters

Canada’s regulatory system aims to ensure proper oversight and monitoring of MSBs for public protection. While complex, the framework is manageable by:

  • Researching requirements early – don’t wait to engage legal counsel
  • Allocating sufficient lead time for applications and processing
  • Budgeting for fees and surety costs – these can be substantial
  • Developing compliance protocols proactively rather than reacting later
  • Staying organized with licensing renewals and ongoing reporting
  • Maintaining open communication with regulators – clarity saves hassle later

With the proper licenses and registrations, MSBs can focus on responsible innovation and serving customers in a rapidly evolving financial services marketplace. Though regulation seems intimidating at first, it need not sink promising business ventures if navigated thoroughly from the start.


Canada has a robust regulatory framework for money service businesses (MSBs) like currency exchanges, money transfer operators, and virtual currency dealers. Businesses must obtain provincial/territorial licenses from financial authorities where they operate, as well as register federally with FINTRAC for anti-money laundering purposes. 

Though complex, meeting these requirements is feasible with adequate planning and preparation. By proactively researching, budgeting for, and developing compliance regimes for licensing and FINTRAC registration, MSBs can successfully steer through Canada’s regulatory waters and focus on responsible innovation.

Frequently Asked Questions (FAQs)

What are some examples of businesses considered MSBs in Canada?

Typical MSBs include currency exchanges, funds transfer services, cheque-cashing businesses, virtual currency dealers, and issuers/sellers of money orders, traveler’s cheques, or other similar instruments.

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Does my MSB need a provincial license for each physical location?

Generally, yes. Most provinces require each permanent brick-and-mortar location to have its own license to operate in that jurisdiction. Some exceptions may apply.

If my business is provincially licensed, do I still need to register with FINTRAC?

Yes, FINTRAC registration is mandatory for all MSBs across Canada, even if already provincially licensed. The requirements are separate but complementary.

What happens if I operate an MSB without the necessary licenses and registration?

You may face fines of up to $500,000, imprisonment of up to 5 years, cease and desist orders, license revocation, and an inability to obtain future licensing/registration.

Can I hold just one provincial license to operate my MSB country-wide?

Generally no – most provinces want you licensed specifically in their jurisdiction to monitor operations. Limited exceptions exist. Without the right provincial licenses, your FINTRAC registration may also be impacted.

Bellie Brown
Bellie Brown
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