If you’re launching a fintech in Canada (or serving Canadian customers from abroad), the first compliance milestone people call an “MSB license” is, in practice, registration with FINTRAC (Canada’s AML regulator) plus any required provincial licence(s)—notably Québec’s Money-Services Business licence.
This guide explains what counts as an MSB, who must register, how to register step-by-step, what you must do after registration, and how renewals work.
MSB, not “MCB”: What a Money Services Business is in Canada
Under the PCMLTFA, you’re an MSB if you conduct one or more of these services for the public in or into Canada:
- Foreign exchange dealing (trading one currency for another)
- Money remittance/transfer (including via digital wallets)
- Issuing or redeeming money orders or similar instruments
- Dealing in virtual currency (e.g., operating a crypto exchange, transferring crypto for clients).
Key point: In Canada, “MSB license” = MSB/FMSB registration with FINTRAC (federal), not a banking license. Some provinces add a separate licence, most notably Québec.
Looking to Register Your MSB?
Who Must Register (MSB vs. FMSB)
- Canadian-based operators that offer MSB activities must register with FINTRAC before operating.
- Foreign providers that direct and provide services to clients in Canada must register as a Foreign MSB (FMSB) – you do not have to be incorporated in Canada to register federally.
Provincial overlay: If you operate in Québec, you must also obtain a Money-Services Business licence with Revenu Québec (under the MSBA). This is in addition to your federal FINTRAC registration.
Note for non-MSB fintechs: If you provide retail payment functions (not FX/crypto/remittance) you may fall under the Retail Payment Activities Act (RPAA), which is separate from MSB rules and supervised by the Bank of Canada. Some businesses need RPAA and MSB, depending on activities.
Step-by-Step: How to Get Registered with FINTRAC
Step 1. Scope your activities and corporate footprint
Decide which MSB activities you’ll offer and whether you’ll operate as a Canadian entity (MSB) or a foreign entity (FMSB) serving Canadians. (Foreign firms can register as FMSBs.).
Step 2. Build your AML/ATF Compliance Programme (“five pillars”)
Before applying, implement a programme that includes:
- Appointed compliance officer with authority to run the programme
- Written policies & procedures (KYC/CDD, monitoring, recordkeeping, reporting)
- Documented risk assessment (money-laundering/TF risks for your products, delivery channels, geographies, customers)
- Ongoing training for relevant staff
- Independent effectiveness review (periodic).
Step 3. Submit the FINTRAC registration
Start by completing FINTRAC’s online pre-registration form; FINTRAC will contact you and provide the full registration form. You’ll disclose business details, ownership, MSB activities, and compliance contacts.
Step 4. If applicable, obtain Québec’s MSB licence
If you operate in Québec, apply for the provincial Money-Services Business licence (Form SM-3-V) with Revenu Québec.
What Ongoing Compliance Looks Like After Registration
Once registered, ongoing obligations include:
- Transaction reporting to FINTRAC (e.g., Suspicious Transaction Reports; Large Cash Transaction Reports; Electronic Funds Transfer Reports; Large Virtual Currency Transaction Reports). The 24-hour rule may require aggregating related transactions.
- Recordkeeping (including copies of certain reports) and KYC/CDD standards.
- Travel rule for EFTs and virtual currency transfers (sender/recipient info must “travel” with the transfer).
- Programme maintenance: training, monitoring, and periodic independent reviews.
Renewal: How Long the Registration Lasts
Your FINTRAC MSB/FMSB registration is valid for two years. You must renew before expiry (FINTRAC provides forms and guidance; if you submit a renewal that’s still being processed past the date, you remain “Registered” in the public registry). Keep your information current and respond to any clarification requests, or your registration can be expired or revoked.
Why This Matters for Fintech Startups
- Banking access & partnerships: Banks and counterparties expect FINTRAC registration (and Québec’s licence where relevant).
- Regulatory clarity: The MSB framework gives a clear baseline to scale compliantly. FINTRAC publishes sector guidance, updates, and modernisation notes.
- Trust & credibility: Being listed in the MSB Registry is public and verifiable by customers and partners.
Frequently Asked Questions
Not exactly. Federal FINTRAC registration is mandatory for MSBs/FMSBs; Québec also requires a provincial MSB licence. Other provinces generally don’t, but always confirm your footprint.
No. Foreign MSBs serving Canadians must register as FMSBs.
Suspicious transactions, large cash, EFT, and large virtual currency transactions; apply the 24-hour rule where required.
Every two years, before your expiry date.
The RPAA covers retail payment service providers (PSPs). It’s separate from MSB rules; some businesses may fall under both depending on services.
Practical Launch Checklist
- Map your activities (FX, remittance, money orders, virtual currency).
- Choose MSB (Canada) or FMSB (foreign) route.
- Build your AML/ATF programme (officer, P&Ps, risk assessment, training, independent review).
- Pre-register with FINTRAC; complete full registration package.
- If operating in Québec, apply for MSB provincial licence (SM-3-V).
- Implement reporting (STRs, LCTRs, EFTRs, LVCTRs), recordkeeping, travel-rule controls.
- Calendar your 2-year renewal and internal programme reviews.
Conclusion
For fintechs handling FX, remittance, money orders, or crypto in/into Canada, treating the “MSB license” as FINTRAC registration + any required provincial licence(s) is essential. With a risk-based AML programme, robust reporting/recordkeeping, and on-time renewals, you’ll have the regulatory foundation to grow—and the credibility banks and partners look for.
