Features of the Activities of a Company Providing Financial Services

Money Services Companies (MSBs) have certain obligations under the Proceeds of Crime (Money Laundering) and Terrorist Financing Act (PCMLTFA) and various regulations to help combat money trafficking and terrorist financing in Canada. If your business is one of these businesses, you need to be aware of all the obligations that apply to you, which include business registration, reporting, record keeping, knowing your own customers, and drawing up a compliance program. To register an MSB, you must complete and submit a pre-registration form. If you want to start operating in this area, then you can take the opportunity to become the owner of a ready-made MSB license for sale. The ELI Deal service specialists will not only help you choose from a variety of offers, but will also accompany you at all stages of the transaction.

What is MSB?

Your company is considered an MSB if you do business in Canada and offer one of the following services to your customers:

• currency exchange;
• money transfers;
• money transaction;
• trading in virtual currency.

In addition, your company is an MSB in some more cases.

1. If you have permission or license to provide any of the above services.
2. You have registered as a person who offers any of these services.
3. You publicly display advertisements (in any way, including newspapers, TV, yellow press, Internet, media, various signs and banners) that you are participating in any of these services.
4. The company does not advertise MSB services, but conducts money transfers of any size or currency transactions in the amount of more than a thousand dollars at a time with the same representative. In this case, a single operation means a set of transactions that are associated with foreign exchange transactions in the amount of less than a thousand dollars each, completed in one day, and together exceeding 1 thousand dollars.
5. The Company issues or redeems funds transfers, travelers checks and other such negotiable instruments in the amount of more than one thousand dollars in a single transaction with one person. Here, also, a transaction means a set of transactions in 24 hours.

You are reporting profits from any of the above services as profits from a separate business in order to pay tax.

FINTRAC Check

To make sure that your company is up to its responsibilities, FINTRAC has the right to ask you questions about the company and to compile some records.

Requirements for Companies that Provide Financial Services

MSB must be registered. Before starting to work in Canada, you must register your own MSB with FINTRAC. Even if you are already registered as an MSB in a province or territory, you still need to register with FINTRAC.

1. Companies that provide monetary services must establish their own compliance program. A good compliance program will be the foundation for all requirements to be met.
2. Companies that provide financial services must conduct due diligence on individuals and legal entities in order to conduct transactions, as well as conduct other activities for thorough due diligence of customers.
3. Companies that provide monetary services must conduct identity verification of individuals and legal entities for certain transactions and activities. You can verify your identity using the methods that are recorded in the PCMLTFA and following the relevant Rules.
4. Companies that provide monetary services have requirements for ongoing monitoring when entering into business relations with a client.
5. Companies that offer financial services should obtain and take appropriate measures to ensure that legal entities receive accurate beneficial ownership information.
6. Companies that provide monetary services must correctly identify the PEP and HIO for certain actions or transactions. If an enterprise that offers financial services confirms that a person is a politician or a high-ranking person, additional related requirements are put forward to him/her.
7. Companies that provide financial services impose 24-hour rule requirements for reports of large cash transactions, reports of large transactions with virtual funds, and reports of incoming or outgoing wire transfers.
8. Companies that provide financial services need to maintain a variety of documents, including records that relate to transactions and customer identification.
9. The requirements of the directives of the ministry apply to all compartments of companies that keep records.
10. FINTRAC has full legal authority to fine reporting companies that do not comply with the requirements of the PCMLTFA and related regulations.

Reports Formation

Companies that provide finance e services must send certain reports to FINTRAC.

1. Suspicious transaction reports.
2. Reports of terrorist property.
3. Reports on large monetary transactions.
4. Reports on large transactions in virtual currency.
5. Reports on the transfer of money in electronic form.

If you want to open your own business in this industry, we advise you to pay attention to a ready-made business and consider the offers for sale on the ELI Deal service website. Our experts will provide you with comprehensive support, help you choose the most suitable deal according to the terms and conditions, and accompany you until the transaction is completed.