You are a money services business (MSB) if all of the following criteria apply:
- You offer at least one money services business (MSB) service (currency exchange in this case)
- You have a place of business in Canada
A company engaged in foreign exchange dealing which conducts transactions where you exchange one type of currency for another (for example, exchanging USD for CAD) is fulfilling the first criteria . However, purchases made with foreign currency are not considered foreign transactions. For example:
- Diana pays for gas and a chocolate bar using a $100 US bill. She asks that her change be given to her in Canadian dollars. This would not be considered a foreign currency exchange transaction.
- Esther pays for a $20 book using a $50 US bill and a $50 US traveller’s cheque. She asks that her change be given to her in Canadian dollars. The change given for one of the $50 is not considered a foreign currency exchange. However, the amount given for the other $50 would be considered a foreign currency exchange.
To fulfill the second criteria a company must meet the following:
- You are incorporated in Canada;
- You have a physical location in Canada; or,
- You have employees, agents or branches in Canada.
Money services businesses (MSBs) must fulfill specific obligations as required by the Proceeds of Crime (Money Laundering) and Terrorist Financing Act (PCMLTFA) and associated Regulations, to help combat money laundering and terrorist activity financing in Canada.
