Originally published in Blakes Bulletin on Financial
Services, December 2010
On December 10, 2010, the Quebec National Assembly adopted Bill
128, which enacts the Money-Services Businesses Act (the
Act), among other legislative measures. As indicated in our
November 2010 Blakes Bulletin on Financial Services summarizing the
principal aspects of this legislation (
Quebec Proposes Licensing Regime for Money-Services
Businesses), the Act introduces a licensing regime under
the authority of the Autorité des marchés financiers
(AMF) that will apply to the following money-services
the issue or redemption of traveller's cheques, money
orders or bank drafts;
cheque cashing; and
the operation of automated teller machines (ATMs), 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.
Quebec is the first province to adopt legislation to regulate
the money-services industry and the Act is being touted as an
important part of the Quebec government's offensive against
money laundering and tax evasion schemes. Adoption of Bill 128 was
therefore a priority for the government, with the legislative
process from the introduction of Bill 128 until its adoption
remarkably lasting just one month, including specific consultations
and detailed study of the proposed legislation by the National
Assembly's Committee on Public Finance.
Various amendments to Bill 128 were adopted during the course of
detailed study, including the following aspects, which should be of
particular interest for money-services businesses that are not
based in Quebec but offer services to Quebec residents:
The requirement to designate a director, officer or partner
domiciled in Quebec or who has a place of business or place of work
in Quebec, as a respondent for the purposes of the Act (the person
that files the licence application and serves as the contact for
AMF purposes), has been amended to allow money-services businesses
that are not constituted under the laws of Quebec and that do not
have their head office or an establishment in the province, to
appoint a respondent in Quebec who is not a director, officer or
partner of the business, but who otherwise meets the applicable
age, legal capacity and domicile requirements under the Act and
other conditions to be set by regulation, provided the person can
properly exercise a respondent's functions with the AMF.
These money-services businesses will be required to give the
appointed person access to the information and documents necessary
to exercise his or her functions.
The requirement to provide, as part of the licence application
process, information regarding employees of mandataries or agents
whose functions are related to the money services offered on behalf
of a moneyservices business, and the related suitability conditions
that would apply to such employees, has been reduced to simply
requiring information regarding each of the officers of a
money-services business' mandataries or agents who are
responsible for the money services offered, with associated
suitability conditions applying to such officers.
The requirement to keep records and registers under the Act in
an establishment in Quebec has been amended, for money-services
businesses that do not have a head office in Quebec, to allow these
records and registers to be kept outside Quebec, provided the
information they contain is available for inspection, in an
appropriate medium, in an establishment of the money-services
business in Quebec or in any other place designated by the AMF.
These money-services businesses must provide the technical
assistance to facilitate inspection of the information.
The Act is set to enter into force on a date or dates to be set
by the Quebec government and moneyservices businesses will be
required to file an application with the AMF for a licence of the
appropriate class within six months after the requirement to be
licensed under the Act comes into force. Money-services businesses
will want to monitor for the development of any implementing
regulations, which may affect specific requirements under the Act,
as well as for any announcements with respect to the Act's
entry into force.
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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