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Money services businesses (MSBs) are Canadian companies that provide certain financial services and are registered with the regulatory authority called FINTRAC. In terms of the range of permitted activities, MSBs are similar to European and British Electronic Money Institutions (EMIs), but can also be engaged in cryptocurrency operations.
Developing and implementing a compliance program is mandatory prior to starting operations. Compliance program is a set of guidelines and procedures designed to ensure that the MSB operates within the legal and regulatory framework set by Canadian authorities. These policies aim to prevent and combat money laundering and terrorist financing, ensure ethical business practices, and protect both the business and its clients from financial crimes and fraud. Advapay Canada drafts compliance programs for various types of money services businesses.
MSBs must appoint a compliance officer responsible for implementation, updating and reviewing effectiveness of the compliance program.
Although there is no such legal requirement, it is strongly recommended to hire a local person with relevant experience in Canada to ensure smooth operations and increase credibility of the company in the eyes of banking partners.
Advapay Canada provides outsourced compliance officers as a part of compliance-as-a-service package.
MSBs must identify their individual and business customers upon establishing a business relationship with them.
Advapay Canada provides KYC/KYB services for its customers as a part of compliance-as-a-service package.
MSBs are considered as reporting entities and must report eligible transactions to FINTRAC.
Main reports are:
Advapay Canada provides reporting services for its customers as a part of compliance-as-a-service package.
Starting from November 1, 2024, a new law comes into effect, requiring some MSBs to store client funds in a safeguarding account in a regulated financial institution.
In addition, every MSB, being part of the global fintech ecosystem, needs to build a network of banking and payment partners. To effectively tackle this task, it's necessary to develop a partnership development program with banks and other financial institutions, as well as a set of documents typically requested by banks when MSBs open correspondent accounts. In addition to compliance policies, this includes a business plan, design of the flow of funds and outsourcing arrangements structure, information about UBOs, directors, and the company itself.
Advapay Canada provides assistance in opening accounts in banks and financial institutions, including preparation of necessary documents.
Although there is no legal requirements related to a core banking platform, it is strongly recommended to deploy such software to ensure smooth operations, especially:
Advapay Canada provides in-house-made core banking platform called Macrobank used by more than 40 regulated financial institutions across the globe.