If adopted, Bill 128 would result in the enactment of the
Money-Services Businesses Act (the MSB Act). The
Québec government has stated that the oversight of
money-services businesses is part of a broad offensive against tax
evasion and money laundering. The MSB Act would require that
persons operating a "money-services business" for
compensation obtain a license from Quebec's financial markets
authority, the Autorité des marchés
financiers (the AMF), and disclose
information about their directors, officers, partners,
shareholders, branch managers, employees working in Quebec and
certain types of lenders they deal with. The term
"money-services business" is not defined but the MSB Act
would define "money services" to include currency
exchange, funds transfer, the issue or redemption of travelers'
cheques, money orders or bank drafts, cheque cashing, or operating
automated teller machines. If the lessor of a commercial space is
responsible for keeping an automated teller machine supplied with
cash, the lessor would also be subject to the licensing provisions
of the MSB Act.
Persons or entities that operate a money-services business on
the date the MSB Act comes into force would have six months from
that date to apply for a license under the MSB Act. They could
continue to operate their money-services business until the AMF
renders a decision on the license application. All license
applications, together with the payment of prescribed fees, would
need to be filed on behalf of the money-services business by a
director, officer or partner that is either domiciled in Quebec or
that has a place of business or a place of work in Quebec.
The MSB Act confers the responsibility of its administration and
enforcement to the AMF. It also gives police forces certain powers,
including, in the case of the Sûreté du Québec,
the power to issue security clearance reports. The Sûreté du
Québec and local municipal polices forces
would be mandated to prepare a security clearance report with
respect to any applicant under the MSB Act, as well as its
directors, officers, partners, shareholders, branch managers,
employees working in Quebec and certain types of lenders they deal
with. These reports would essentially consist of criminal
background checks on the key figures in the money-services business
and would be intended to provide the AMF with information for the
purposes of its decision to issue or deny a license to the
applicant. The Sûreté du Québec or a police
force could object to the issue of a license or could request that
a license be suspended or revoked, and the AMF could refuse to
issue a license if the requirements of the MSB Act are not met and,
in particular, if the applicant is not of good moral character.
The MSB Act would also require that a money-services business,
other than with respect to the operation of automated teller
machines, verify the identity of its customers (in the manner to be
prescribed by regulations to be adopted under the MSB Act), as well
as maintain and update certain prescribed records and registers. A
money services business would also be required to verify the
identity of its other co-contracting parties as part of its
The content of this article is intended to provide a general
guide to the subject matter. Specialist advice should be sought
about your specific circumstances.
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