Quick summary
If you plan to operate payments, remittances, currency exchange, or virtual-asset services in Canada, you very likely must register as a Money Services Business (MSB) with FINTRAC. Registration and a robust anti-money-laundering (AML) regime are prerequisites for onboarding banks, partnering with PSPs, and scaling safely. This guide explains exactly what an MSB is in Canada, who must register, the step-by-step registration process, required policies and documents, realistic timelines, and how 7BaaS helps you move faster and stay compliant.
What is an MSB (Money Services Business) in Canada?
A Money Services Business is an entity that provides one or more of the following services to the public: currency exchange (foreign exchange), remitting or transferring funds, issuing or redeeming money orders, dealing in virtual currencies, or performing similar money services. MSBs are regulated under Canada’s anti-money-laundering framework and must register with FINTRAC before operating in Canada. The definition is intentionally broad so firms — including fintechs, remittance companies, prepaid card issuers, and certain crypto platforms — understand when the rules apply.
Why it matters: FINTRAC registration is not just paperwork. Banks, PSPs, and commercial partners typically require proof of registration and an operational AML program. Without it you risk losing banking access, partnerships, and the ability to acquire customers in Canada.
Who must register — MSB vs FMSB (foreign MSB)
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Canadian MSB: A business that has a place of business in Canada and provides MSB services to the public must register with FINTRAC.
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Foreign MSB (FMSB): Non-Canadian businesses that direct or provide MSB services to clients in Canada may also be required to register before offering services to Canadian consumers. FINTRAC’s guidance makes clear that a cross-border digital presence does not automatically exempt you from registration.
If you’re uncertain whether your product falls within the MSB definition, treat registration as a conservative step — many cross-border fintechs that engage Canadian customers opt to register to avoid enforcement risk and to improve banking access.
Core FINTRAC obligations for MSBs (overview)
When you register as an MSB you must put in place and maintain an AML/CTF program that typically includes:
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A formal, documented compliance program (policies, procedures, and written controls).
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Appointment of a Compliance Officer responsible for AML/CTF measures.
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KYC / customer identification procedures and risk-based customer due diligence.
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Record-keeping and transaction reporting (including suspicious transaction reports where required).
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Employee training and an independent audit/monitoring plan.
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Periodic review and updates to policies as the business evolves.
FINTRAC publishes guidance on record-keeping, client ID, and sampling — follow those documents to structure your program correctly.
Step-by-step: How to register an MSB with FINTRAC
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Decide whether you qualify as an MSB or FMSB. Review the specific services you provide (foreign exchange, remittance, virtual currency dealing, etc.). If you have customers in Canada or a place of business there, you likely need to register.
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Pre-registration request. FINTRAC’s process begins with a pre-registration/contact step where you request registration and the agency provides guidance and the formal registration form. Expect to be contacted by a FINTRAC compliance officer after you submit the pre-registration.
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Prepare documentation. Draft your AML policies, KYC scripts, transaction monitoring descriptions, appoint compliance staff, and collect corporate documents (incorporation papers, director/beneficial owner info).
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Complete the registration form. Use FINTRAC’s online process (they will provide enrollment steps after pre-registration). There is no FINTRAC registration fee, but be prepared to invest in preparing supporting documentation.
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Operational readiness & bank onboarding. Once registered, present your compliance package to banks and PSPs. Banks will expect to review KYC sampling, policies, and proof of controls before offering accounts or acquiring arrangements.
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Ongoing obligations. Implement transaction monitoring, SAR filing, record retention, staff training, and program audits—FINTRAC expects MSBs to actively maintain compliance.
Typical timelines — realistic expectations
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Pre-registration & guidance: a few business days to two weeks.
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Document preparation: depends on the business maturity — 2–8 weeks if you already have governance and policies drafted.
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Full registration acceptance: commonly a few weeks to a few months; timelines vary with completeness and complexity — budget conservatively. Some industry sources report registration completion cycles of 4–12 weeks in typical cases.
Important: Registering with FINTRAC is mandatory before you begin providing MSB services in Canada. Delaying registration while operating risks enforcement and bank account closures.
Documents, systems & controls you must have ready
Prepare the following (this list is commonly requested by banks and FINTRAC reviewers):
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Corporate documents: Certificate of incorporation, shareholder register, corporate structure, and beneficial ownership.
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Business plan & financials: 12- to 24-month projections, pricing, expected volumes, and settlement flow diagrams.
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AML Program: written policies, transaction monitoring approach, suspicious activity reporting (SAR) procedures, KYC/EDD rules, sanctions screening. FINTRAC
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Compliance team: CVs of directors, Compliance Officer, and senior managers (fit & proper evidence).
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Banking & PSP relationships: letters of intent (if available), or a clear plan for settlement & float management.
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IT & security controls: system architecture, encryption, access controls, disaster recovery and business continuity plans.
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Third-party vendor contracts: KYC/ID providers, payment processors, custody providers (e.g., crypto custody if relevant).
Banks will often ask to review sample KYC files and transaction monitoring alerts — prepare sanitized examples in advance.
Record keeping, reporting, and penalties
FINTRAC mandates specific record-keeping and reporting rules for MSBs. The registry is public and searchable; failure to maintain compliance can lead to administrative monetary penalties and enforcement actions. Maintain clear record retention policies and be responsive to FINTRAC clarification requests.
Cross-border & crypto considerations (FMSBs and VASPs)
If your platform serves Canadians from outside Canada (web or app), you may fall under FINTRAC rules as an FMSB — this is now common for crypto exchanges and fintechs. Virtual asset service providers (VASP) dealing with crypto transactions are explicitly within FINTRAC’s scope where they provide services to Canadians. Understand custody vs non-custody models and adapt AML controls accordingly.
Banks & partners: How to improve your chances of getting accounts
Banks will judge your MSB application by the strength of your compliance program, the quality of senior management, historical AML controls (if you operated elsewhere), and clear transaction flows. To improve acceptance:
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Prepare a bank-ready compliance pack: policies, role descriptions, KYC samples, monitoring logic and SLAs for third parties.
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Show low-risk transaction flows at launch or staged KYC thresholds.
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Offer references or partnerships with established PSPs or sponsor banks.
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If immediate banking is essential, consider white-label or partnership routes to accelerate go-to-market. 7BaaS supports introductions to banking partners and white-label solutions. (See our White-Label page.)
Buying vs applying: faster routes to operating in Canada
If time to market is critical, many clients choose one of these alternatives:
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Acquire an already registered MSB (buy instead of apply). This can dramatically shorten time to operations — but do rigorous due diligence for AML history and bank continuity.
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Use a white-label or sponsor bank to operate under an existing arrangement while you complete your registration.
7BaaS connects buyers and sellers of licensed entities and offers transaction support and due diligence services to limit takeover risks. See our Buy/Sell marketplace and Services pages.
Practical MSB Start Checklist
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Confirm MSB/FMSB status under FINTRAC definitions.
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Submit FINTRAC pre-registration request.
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Draft AML policy, KYC rules, SAR procedure, and compliance manual.
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Appoint Compliance Officer & prepare CVs / fit & proper evidence.
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Prepare bank/PSP pitch pack and letters of intent.
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Implement transaction monitoring and secure IT controls.
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Register on FINTRAC and complete the registration form.
How 7BaaS can help
7BaaS offers MSB readiness reviews, document drafting support, bank introductions, and options to buy existing compliant vehicles. If you prefer to avoid common pitfalls, our pre-application audits and banking introductions accelerate approval and reduce friction during onboarding. Book a free consultation or see our Services page to get started.
Book a consultation
Services & MSB support
Buy or sell licensed companies
FAQs (for page & FAQ schema)
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Do I need to register with FINTRAC before operating?
Yes — MSBs must register with FINTRAC before beginning operations in Canada. Failure to register risks enforcement action and can lead to bank refusals. -
What services make a business an MSB?
Typical services include foreign exchange, remittance/transfers, issuing or redeeming money orders, and dealing in virtual currency. Review FINTRAC’s MSB definitions. Miller Thomson -
How long does FINTRAC registration take?
Pre-registration is quick, but full readiness depends on your documentation. Allow several weeks for pre-registration and 4–12 weeks for completion in many cases. -
Will registering help me open a bank account?
Registration is necessary but not sufficient — banks will review your compliance program, senior management, and KYC samples. A strong, well-documented AML program improves acceptance. -
Can non-Canadian firms operating online be considered FMSBs?
Yes — if your business directs services to Canadians, you may need to register as a Foreign MSB (FMSB). Consult FINTRAC guidance.
Resources:
Regulating money service businesses in Canada: The not so well known money service business regime
https://fintrac-canafe.canada.ca/guidance-directives/recordkeeping-document/record/msb-eng?utm_source
