Important Information for Money Service Business (MSB) in Canada
This is about substance. The regulator wants the Canadian MSB to be somehow connected to Canada. Such connection can be created via a resident director, local office, bank account and Canadian resident clients – or combination of this.
New requirements under Payment Retail Activities Act
What is it about?
Please, contact our manager for free check of your compliance with requirements of the Payment Retail Activities Act (Canada).
  • To build your presence in Canada
  • To open Trust/Safeguarding account (Q1 2024 , after publication of End-user funds Safeguarding Requirements by CB of Canada)
  • To draft Risk management and safeguarding procedures according to new legislation (Starting Q2 2024 - after publication of Guide by CB of Canada)
  • Assistance with the necessary information preparation and application submission to PSP Connect (deadline is 1st November, 2024)
We offer our assistance:
Who falls under this act? – Payment Service Provider
For your information here is a summary of new requirements:
  • Providing or maintaining a payment account for the purpose of maintaining electronic funds transfer (EFT);
  • Holding funds on behalf of an end user;
  • Initiating an EFT at the request of an end user;
  • Authorizing an EFT, or transmitting, facilitating, or receiving EFT instructions;
  • Providing clearing and settlement services.
Who is the Payment service provider?
An individual or entity that performs payment functions as a service or business activity that is not incidental to another service or business activity are subject to this legislation.
Perform payment functions related to an electronic funds transfer made in Canadian or foreign fiat currencies.
Criteria for qualification
Have a place of business in Canada (office or employees) regardless of where their end users are or where they direct their services
1
2
Have a place of business outside of Canada but perform retail payment activities for an end user in Canada and direct retail payment activities at individuals or entities in Canada.
or
3
Perform payment functions that are not excluded from the RPAA and associated regulations (see 6-11 of the RPAA )
Entity based exclusion:
- banks and authorized foreign banks (pursuant to the Bank Act);
- credit unions, insurance companies, and trust and loan companies;
- agents and mandataries of PSPs;
- Payments Canada;
- the Society for Worldwide Interbank Financial Telecommunication (SWIFT) (excluded through the Regulation).
Activity based exclusion:
- transactions using automatic banking machines;
- internal transactions among affiliated entities;
- securities transactions performed by an individual or entity that is regulated or exempted from regulation under Canadian securities legislation.
  • Contact Information
  • Detailed information on business structure
  • Payment functions performed
  • Values and volumes of transaction
  • Trust/Segregated account for clients funds + issurance
  • Risk management and incident response framework
  • License number of MSB registration in FINTRAC
  • Application fee payment in the amount of 2500 CAD
What information you must provide for submission of application
Additional information from Central Bank
  • Guide on Operational Risk requirements, End-user funds Safeguarding Requirements, Significant Change Reporting, and Incident Reporting – Q1 2024;

  • Finalised Guidance on Risk management requirements, Significant Change Reporting, and Incident Reporting – Q3 2024
Deadlines November 1st, 2024. Time for submission – 15 days
Payment Service Provider will continue to meet its’ AML obligations under relevant Canadian AML Regulations as MSB registered with FINTRAC.
Payment Service Provider vs MSB
Accordingly, existing MSBs, who will obtain Payment Service Provider license from Bank of Canada, will continue to be registered with FINTRAC as MSB, while any new businesses obtaining Payment Service Provider will also need to be registered as MSB with FINTRAC and commit meeting their AML obligations under relevant Canadian AML Regulations and FINTRAC guidance.
Need a consultation?
Please contact us client@platforma365.com to book a meeting with an expert
Solutions
Company
+376 695304
info@platforma365.com
Office Suite 24, Block 6, Water Gardens, Waterport Wharf, GX11 1AA, Gibraltar
Copyright © 2024 Platforma365 Ltd. All Rights Reserved.
Powered by Doc Infosafe (Israel) Ltd