Please note this blog was authored by Jennifer Egelnick,
Manager, National Anti-Money Laundering Practice
The Autorité des marchés financiers (AMF) is the
regulatory and oversight body for Québec’s financial
industry. Amendments to the Policy Statement to the Money Services
Businesses Act (the Act) published on February 12, 2015 now require
money service businesses (MSBs) operating a virtual currency
automated teller machine or a platform for trading virtual
currency, like Bitcoin, to obtain a license.
As of April 2012, the Money Service Business Act requires all
MSBs which offer currency exchange, cheque cashing, operate ATMs,
wire transfers, issue or redeem bank drafts, money orders and
traveller’s cheques, to obtain the correct class of license
from the provincial regulator. Federal regulations dealing with
MSBs still do not cover cheque cashers or ATM operators.
In order to obtain a license, MSBs are required to provide
personal information on officers, lenders, business partners,
directors and owners for analysis. The AMF, along with local
authorities and the Sûreté du Québec, reviews
application submissions and performs background checks in order to
issue clearance reports and licenses based on integrity and good
The Act also stipulates obligations for MSBs around record
keeping and customer ID verification with four types of
transactions at certain dollar thresholds. Failure to meet these
obligations can result in significant monetary fines or the
revocation of an MSB license.
While the AMF awards licenses and provides the framework for
legislating money services in Québec, it does not regulate
virtual currency. At the time when the policy statement was
released, the AMF warned consumers about some of the risks
associated with virtual currency; specifically the volatile nature
of the product.
Further, the AMF points out that transactions involving virtual
currency are not covered by the financial services compensation
fund or the deposit insurance fund and losses incurred by consumers
are not covered under current policies. Finally, the AMF notes that
the anonymity around the product and the low cost of trading make
virtual currencies an attractive option for those wishing to
defraud consumers through Ponzi schemes and fraudulent
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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The Canadian Office of the Superintendent of Financial Institutions ("OSFI") recently ruled that a bank cannot promote comprehensive credit insurance ("CCI") within its Canadian branches under the Insurance Business (Banks and Bank Holdings Companies) Regulations (the "Regulations").
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