Canada: Quebec Proposes Licensing Regime for Money-Services Businesses

Copyright 2010, Blake, Cassels & Graydon LLP

Originally published in Blakes Bulletin on Financial Services, November 2010

On November 10, 2010, Raymond Bachand, Minister of Finance of the Province of Quebec, introduced legislation regarding the licensing of money-services businesses: An Act to enact the Money-Services Businesses Act and to amend various legislative provisions mainly concerning special funds and the financial sector (Bill 128).

The proposed Money-Services Businesses Act covers many of the same services and issues that are already dealt with in the federal Proceeds of Crime (Money Laundering) and Terrorist Financing Act (the Federal Act). However, a key aspect of the Bill appears to be provisions that will provide and allow for sharing of information between Quebec regulatory, governmental and law enforcement entities, particularly with respect to licensing decisions and any cessation in activities of money-services businesses.

It remains to be seen whether and how the Quebec legislation will streamline efforts and administrative requirements with the federal authorities to avoid unnecessary duplication in requirements for Quebec money-services businesses. This may be clarified in the course of the legislative process and once the Bill's implementing regulations are proposed.

Under the proposed legislation, persons or entities operating money-services businesses will require licences, with the following services considered to be money services:

  • currency exchange,
  • funds transfer;
  • the issue or redemption of traveller's cheques, money orders or bank drafts;
  • cheque cashing; and
  • the operation of automated teller machines, including the leasing of a commercial space intended as a location for an automated teller machine if the lessor is responsible for keeping the machine supplied with cash.

The proposed legislation will not apply to persons who offer money services as part of their activities if these activities are governed by other specified legislation. For example, banks are exempt from the proposed legislation. However, the exemptions do not apply to most entities that are already money-services businesses subject to the Federal Act.

The Autorité des marchés financiers (the AMF) will be the regulator responsible for the administration and enforcement of the Quebec money-services regime and is to propose the regulations under the legislation (with the approval of the Minister or, in some cases, the government).

Among the proposed conditions to obtain a licence, a potentially troublesome requirement in the current drafting of the Bill is that the director, officer or partner of a money-services business applying for a licence must "be domiciled in Quebec or have a place of business or place of work in Quebec". For those entities that are Quebec-based or have a director or officer with a domicile or a place of business in the province, this may not be a difficult requirement. However, the legislation would also apply to entities that do not have a physical presence in the province but that nevertheless offer money services in Quebec, such as through the Internet or through Quebec-based agents or mandataries. In these latter cases, this requirement may be particularly problematic for businesses that do not have a director or officer with a domicile or place of business in Quebec.

A second concern regarding the licensing conditions is that several of the suitability conditions apply not only to the applicant and its directors, but also to each of the following, in respect of an applicant: "officers, directors, partners or branch managers... each of its employees working in Québec..." and "any other person specified by regulation". Certain conditions will also apply to agents of a money-services business and each of an agent's employees whose functions are related to the money-services business. The current drafting of the legislation therefore has a wide reach and, while draft regulations have not been provided, additional persons involved in the money-services business could be caught by the concept of "any other person specified by regulation". Money-services businesses will want to follow development of the Bill and regulations on this point.

Other licensing conditions are not likely to be problematic for an established money-services business, since most of these focus on the "suitability" of the corporate entity as the applicant. However, we suggest that money-services businesses should review the application requirements and licence decision provisions of the proposed legislation to determine whether there are any conditions that are of concern to them.

The proposed legislation includes requirements regarding identifying customers and co-contracting parties of a money-services business and maintenance of specified records and registers, notwithstanding that the Federal Act already imposes these types of requirements on those money-services businesses that are subject to the federal regime.

The required records and registers must be kept in Quebec, must be maintained in such a manner so as to allow auditing and must be readily available to the AMF. This requirement will be problematic for money-services businesses operated outside Quebec but offering services to residents of Quebec. Money-services businesses will want to monitor developments in this respect that may be introduced during the legislative process.

The detailed licence application and ongoing requirements for money-services businesses subject to the proposed legislation will be set out in regulations. In particular, the regulations may require certain money-services businesses to provide security for the performance of their obligations and will establish the amount and form of security required. This has the potential to impose significant new requirements on money-services businesses and will likely be of concern to many such businesses.

Licensed money-services businesses that want to cease activities will be required to give the AMF notice. The proposed legislation also provides for significant information sharing between the AMF, the Sûreté du Québec, local police forces and the Ministère du Revenu, particularly with respect to licensing decisions and suspension or cessation of the activities of a money-services business.

The AMF will have enforcement powers under the proposed legislation, including a right to compel self incriminating testimony, and that legislation also includes certain material penal provisions.

Given the duplication of many aspects of the proposed legislation and the Federal Act, an indication of how the legislation proposes to avoid duplicating requirements applicable to businesses that will be subject to both regimes would be helpful for affected businesses. Similarly, the proposed legislation could be improved by clarifying the manner in which requirements under the Act will apply to money-services businesses that operate from outside the province, whether online, through agents in Quebec or otherwise.

Measures such as the following would greatly ease the application and implementation of the proposed legislation, particularly for entities operating outside Quebec or that are subject to the Federal Act:

  1. allowing entities without a presence in Quebec to provide the AMF with access to required records and registers from within the province, but without requiring these to be physically located in Quebec;
  2. exempting entities subject to the Federal Act that already keep substantially similar records and registers under the Federal Act from the requirement to keep separate records under the proposed Quebec legislation;
  3. setting out principles with respect to the application of the proposed legislation that will, in practice, favour streamlining of the Quebec requirements with those under the Federal Act; and
  4. requiring the AMF to seek out appropriate agreements with the relevant federal entities, such as FINTRAC, in order to avoid unnecessary duplication in supervisory functions.

At the request of the official opposition, Bill 128 is expected to be subject to some form of public consultation but further information is not yet available in this respect. Businesses that provide "money services", as defined by the proposed Act, whether in Quebec or to residents of Quebec, may want to consider making representations regarding this proposed legislation.

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.

To print this article, all you need is to be registered on

Click to Login as an existing user or Register so you can print this article.

Events from this Firm
26 Oct 2018, Other, Vancouver, Canada

Cybersecurity, including data privacy and security obligations, has become a critical chapter in every company’s risk management playbook.

30 Oct 2018, Other, Toronto, Canada

Please join us for discussions on recent updates and legal developments in pension and employee benefits as well as employment law issues.

12 Nov 2018, Other, Toronto, Canada

Stories aren’t falsehoods. Stories are the root of all effective human communications: they motivate, animate and clarify. If you aren’t telling stories, you probably aren’t getting your point across.

Similar Articles
Relevancy Powered by MondaqAI
Blake, Cassels & Graydon LLP
In association with
Related Topics
Similar Articles
Relevancy Powered by MondaqAI
Blake, Cassels & Graydon LLP
Related Articles
Related Video
Up-coming Events Search
Font Size:
Mondaq on Twitter
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).
Email Address
Company Name
Confirm Password
Mondaq Topics -- Select your Interests
 Law Performance
 Law Practice
 Media & IT
 Real Estate
 Wealth Mgt
Asia Pacific
European Union
Latin America
Middle East
United States
Worldwide Updates
Registration (you must scroll down to set your data preferences)

Mondaq Ltd requires you to register and provide information that personally identifies you, including your content preferences, for three primary purposes (full details of Mondaq’s use of your personal data can be found in our Privacy and Cookies Notice):

  • To allow you to personalize the Mondaq websites you are visiting to show content ("Content") relevant to your interests.
  • To enable features such as password reminder, news alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our content providers ("Contributors") who contribute Content for free for your use.

Mondaq hopes that our registered users will support us in maintaining our free to view business model by consenting to our use of your personal data as described below.

Mondaq has a "free to view" business model. Our services are paid for by Contributors in exchange for Mondaq providing them with access to information about who accesses their content. Once personal data is transferred to our Contributors they become a data controller of this personal data. They use it to measure the response that their articles are receiving, as a form of market research. They may also use it to provide Mondaq users with information about their products and services.

Details of each Contributor to which your personal data will be transferred is clearly stated within the Content that you access. For full details of how this Contributor will use your personal data, you should review the Contributor’s own Privacy Notice.

Please indicate your preference below:

Yes, I am happy to support Mondaq in maintaining its free to view business model by agreeing to allow Mondaq to share my personal data with Contributors whose Content I access
No, I do not want Mondaq to share my personal data with Contributors

Also please let us know whether you are happy to receive communications promoting products and services offered by Mondaq:

Yes, I am happy to received promotional communications from Mondaq
No, please do not send me promotional communications from Mondaq
Terms & Conditions (the Website) is owned and managed by Mondaq Ltd (Mondaq). Mondaq grants you a non-exclusive, revocable licence to access the Website and associated services, such as the Mondaq News Alerts (Services), subject to and in consideration of your compliance with the following terms and conditions of use (Terms). Your use of the Website and/or Services constitutes your agreement to the Terms. Mondaq may terminate your use of the Website and Services if you are in breach of these Terms or if Mondaq decides to terminate the licence granted hereunder for any reason whatsoever.

Use of

To Use you must be: eighteen (18) years old or over; legally capable of entering into binding contracts; and not in any way prohibited by the applicable law to enter into these Terms in the jurisdiction which you are currently located.

You may use the Website as an unregistered user, however, you are required to register as a user if you wish to read the full text of the Content or to receive the Services.

You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these Terms or with the prior written consent of Mondaq. You may not use electronic or other means to extract details or information from the Content. Nor shall you extract information about users or Contributors in order to offer them any services or products.

In your use of the Website and/or Services you shall: comply with all applicable laws, regulations, directives and legislations which apply to your Use of the Website and/or Services in whatever country you are physically located including without limitation any and all consumer law, export control laws and regulations; provide to us true, correct and accurate information and promptly inform us in the event that any information that you have provided to us changes or becomes inaccurate; notify Mondaq immediately of any circumstances where you have reason to believe that any Intellectual Property Rights or any other rights of any third party may have been infringed; co-operate with reasonable security or other checks or requests for information made by Mondaq from time to time; and at all times be fully liable for the breach of any of these Terms by a third party using your login details to access the Website and/or Services

however, you shall not: do anything likely to impair, interfere with or damage or cause harm or distress to any persons, or the network; do anything that will infringe any Intellectual Property Rights or other rights of Mondaq or any third party; or use the Website, Services and/or Content otherwise than in accordance with these Terms; use any trade marks or service marks of Mondaq or the Contributors, or do anything which may be seen to take unfair advantage of the reputation and goodwill of Mondaq or the Contributors, or the Website, Services and/or Content.

Mondaq reserves the right, in its sole discretion, to take any action that it deems necessary and appropriate in the event it considers that there is a breach or threatened breach of the Terms.

Mondaq’s Rights and Obligations

Unless otherwise expressly set out to the contrary, nothing in these Terms shall serve to transfer from Mondaq to you, any Intellectual Property Rights owned by and/or licensed to Mondaq and all rights, title and interest in and to such Intellectual Property Rights will remain exclusively with Mondaq and/or its licensors.

Mondaq shall use its reasonable endeavours to make the Website and Services available to you at all times, but we cannot guarantee an uninterrupted and fault free service.

Mondaq reserves the right to make changes to the services and/or the Website or part thereof, from time to time, and we may add, remove, modify and/or vary any elements of features and functionalities of the Website or the services.

Mondaq also reserves the right from time to time to monitor your Use of the Website and/or services.


The Content is general information only. It is not intended to constitute legal advice or seek to be the complete and comprehensive statement of the law, nor is it intended to address your specific requirements or provide advice on which reliance should be placed. Mondaq and/or its Contributors and other suppliers make no representations about the suitability of the information contained in the Content for any purpose. All Content provided "as is" without warranty of any kind. Mondaq and/or its Contributors and other suppliers hereby exclude and disclaim all representations, warranties or guarantees with regard to the Content, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. To the maximum extent permitted by law, Mondaq expressly excludes all representations, warranties, obligations, and liabilities arising out of or in connection with all Content. In no event shall Mondaq and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use of the Content or performance of Mondaq’s Services.


Mondaq may alter or amend these Terms by amending them on the Website. By continuing to Use the Services and/or the Website after such amendment, you will be deemed to have accepted any amendment to these Terms.

These Terms shall be governed by and construed in accordance with the laws of England and Wales and you irrevocably submit to the exclusive jurisdiction of the courts of England and Wales to settle any dispute which may arise out of or in connection with these Terms. If you live outside the United Kingdom, English law shall apply only to the extent that English law shall not deprive you of any legal protection accorded in accordance with the law of the place where you are habitually resident ("Local Law"). In the event English law deprives you of any legal protection which is accorded to you under Local Law, then these terms shall be governed by Local Law and any dispute or claim arising out of or in connection with these Terms shall be subject to the non-exclusive jurisdiction of the courts where you are habitually resident.

You may print and keep a copy of these Terms, which form the entire agreement between you and Mondaq and supersede any other communications or advertising in respect of the Service and/or the Website.

No delay in exercising or non-exercise by you and/or Mondaq of any of its rights under or in connection with these Terms shall operate as a waiver or release of each of your or Mondaq’s right. Rather, any such waiver or release must be specifically granted in writing signed by the party granting it.

If any part of these Terms is held unenforceable, that part shall be enforced to the maximum extent permissible so as to give effect to the intent of the parties, and the Terms shall continue in full force and effect.

Mondaq shall not incur any liability to you on account of any loss or damage resulting from any delay or failure to perform all or any part of these Terms if such delay or failure is caused, in whole or in part, by events, occurrences, or causes beyond the control of Mondaq. Such events, occurrences or causes will include, without limitation, acts of God, strikes, lockouts, server and network failure, riots, acts of war, earthquakes, fire and explosions.

By clicking Register you state you have read and agree to our Terms and Conditions