The Money Services Business Act (BC) passed its third reading on April 26, 2023 and received Royal Assent on May 11, 2023. This Act aims to regulate the activities of Money Services Businesses (“MSBs”) operating within BC, and to supplement the existing obligations of MSBs under the Proceeds of Crime (Money Laundering) and Terrorist Financing Act (S.C. 2000, c. 17) (“PCMLTFA”). The BC Financial Services Authority (“BCFSA”) has been appointed as the responsible regulator for the Act, and they estimate that there are approximately 578 businesses operating within BC that will be effected by these changes.
Under the Act, “Money Services” refers to (a) foreign exchange dealing, (b) remitting funds or transmitting funds, (c) issuing or redeeming money orders, traveller’s cheques or other negotiable instruments, and (d) other services included by regulation. If an organization engages in any of these activities, the organization will be required to (1) register with the BCFSA, (2) submit annual reports on their activities, and (3) maintain appropriate records in compliance with regulations. The specific details to be included in such records are yet to be confirmed.
Any business subject to this Act should take their obligations seriously, as the regulator may choose to refuse or cancel your registration as an MSB, and to prevent your engagement in Money Services. This could have a significant impact on your organization’s ability to remain in business. In addition to refusing or cancelling your registration, the regulator may impose administrative penalties of up to $100,000 and fines of up to $200,000.
There has been no date provided for when the Act will be effective. However, we expect to see an announcement from the BC Financial Services Authority (“BCFSA”) relatively soon. There will be a transition period for businesses to prepare and submit their applications, prior to being required to cease operation in the province. We suggest keeping an eye out for updates in the next few months.