Criteria for “Engaged in the Business of Money Services Business or Foreign Exchange Dealer”

1. a money services business (MSB); or
2. a foreign exchange dealer.

You are not considered to be in either of those businesses if you carry out MSB or foreign exchange activities as part of your activities as a legal counsel, an accountant, a securities dealer, or a casino.

1. Are you engaged in the business of a Money Services Business?

You own or operate a business and you offer money transfer services in any amount. ¹

Your business is also considered to be a Money Services Business if any of the following applies:

• Your business issues or redeems money orders, travellers’ cheques or other similar negotiable instruments for more than $1,000 with the same person on the same day; ²
• You advertise (by means of newspaper, television, yellow pages, internet, any other media, or by an interior or exterior sign) the fact that you engage in the activity;
• You hold a permit or licence related to the activity;
• You are registered as someone carrying on the activity; or
• You report the income of that activity as income from a separate business for tax purposes.

Note: If you only conduct Money Services Business activities as an agent for another business that is a Money Services Business please refer to the Act and Regulations to determine your obligations.

2. Are you engaged in the business of a foreign exchange dealer?

Your business is a foreign exchange dealer if any of the following applies:

• Your business conducts foreign exchange transactions for more than $1,000 with the same person on the same day; ²
• You advertise (by means of newspaper, television, yellow pages, internet, any other media, or by an interior or exterior sign) the fact that you engage in the activity of foreign exchange;
• You hold a permit or licence related to the activity;
• You are registered as someone carrying on the activity; or
• You report the income of that activity as income from a separate business for tax purposes.

A foreign exchange transaction is one in which any currency is exchanged for another. It does not include transactions where change is provided in Canadian currency after the purchase of goods or services with foreign currency. Any bills, traveller’s cheques, money orders, etcetera provided in addition to the one(s) required to pay for the product or service would be considered a foreign exchange.

Example: If a client purchasing a product with foreign currency (cash, traveller’s cheque in a foreign currency, money order in a foreign currency, etcetera) receives change from the purchase in Canadian currency, this would not be considered a foreign exchange transaction.

Example: If a client provides two fifty US dollar bills as payment for a $20 CDN purchase, the Canadian currency provided for the first $50 US would be considered change; the Canadian currency provided for the second $50 US would be considered a currency exchange. If the transaction does involve a foreign exchange transaction please refer to the above-noted criteria to determine if you are engaged in the business of a foreign exchange dealer.

¹ Money services businesses include alternative money remittance systems, such as Hawala, Hundi, Chitti, etc. Money services businesses also include financial entities when they remit or transmit funds, issue or redeem money orders, travellers’ cheques or other similar negotiable instruments for anyone who is not an account holder. Back

² For the purposes of this interpretation note, two or more transactions related to the redemption of money orders, travellers’ cheques or other similar negotiable instruments or related to a foreign exchange transaction of less than $1,000 each that are made within 24 consecutive hours and that total $1,000 or more are considered to be a single transaction of $1,000. Back