CanadaUnderstanding the Role of Compliance Manager in Canada MSBs

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  • The money services business (MSB) industry, consisting of money transmitters and foreign exchange providers, is a significant sector that spans from small businesses to large, global corporations. Compliance with anti-money laundering (AML) regulations is perceived to be inconsistent across the industry. This perception is reinforced by the actions of Canada’s Financial Transaction and Reports Analysis Centre (FINTRAC), which has increasingly been penalizing and publicly naming non-compliant organizations under the Proceeds of Crime (Money Laundering) and Terrorist Financing Act (PCMLTFA).
  • As regulators place more emphasis on AML compliance, MSBs, and their partners, including banks and financial correspondents, are closely examining the industry and some are refusing to work with MSBs. Canadian MSBs are recognizing the risks of money laundering and terrorist financing and are increasingly focused on managing their relationships with partners. They are seeking solutions and looking to learn from the experiences of others in the industry.
  • Entities and individuals involved in money service activities in Canada are subject to regulation under the Proceeds of Crime (Money Laundering) and Terrorist Financing Act (PCMLTFA) and its associated regulations. The Financial Transactions and Reports Analysis Centre of Canada (FINTRAC) is the regulatory authority responsible for enforcing these laws. Compliance with anti-money laundering (AML) procedures is mandatory for MSBs and is guided by FINTRAC’s recommendations.
  • To ensure compliance, MSBs must have a robust compliance program that includes a Compliance Officer, up-to-date written policies and procedures, a risk assessment of the business, compliance training programs for employees and authorized individuals, ongoing compliance training, and a plan to review and test the effectiveness of the program at least every two years. FINTRAC has been increasingly penalizing and publicly disclosing the names of MSBs that do not meet regulatory requirements, causing some banks and financial correspondents to closely scrutinize their MSB partners and even refuse to bank or transact with them. As a result, Canadian MSBs are seeking solutions and learning from others in the industry to manage their relationships with their partners effectively.
  • Tetra Consultants understand the importance of compliance in the money service industry and the role of Compliance Manager in Canada MSB to oversee a company’s policies and procedures. We assist international clients with obtaining a Canada MSB License and recruiting a compliance officer to ensure they meet the regulatory requirements. 
  • We can also provide guidance on developing comprehensive and robust compliance programs that are aligned with the recommendations of FINTRAC. Our team can conduct risk assessments of the business to identify potential money laundering and terrorist financing risks and develop tailored compliance training programs for employees, agents, and other authorized persons. We can also help MSBs establish ongoing compliance monitoring and testing programs to ensure the effectiveness of their compliance programs. Our regulatory compliance consulting is aimed at enabling MSBs to comply with the regulations and minimize their exposure to regulatory penalties and reputational risks.

Who is a compliance manager?

  • A compliance manager is responsible for overseeing a company’s policies and standards to ensure that all departments comply with the necessary rules and regulations. Depending on the industry, a compliance manager may be required to perform audits, develop procedures, and evaluate potential risks. Understanding this position can help you decide if you want to pursue a career as a compliance manager. In this article, we will explain the duties of a compliance manager, outline the qualifications and steps required to become one, discuss the work environment, and provide average salary information to help you explore this career path.

What is the role of Compliance Manager in Canada MSB?

In this section of the article, our team of experts has outlined the important aspect concerning the role of compliance Manager in Canada MSB: 

  1. Develop and Implement Compliance Programs: The compliance manager must design, develop, and implement comprehensive compliance programs in line with Canada’s Proceeds of Crime (Money Laundering) and Terrorist Financing Act (the “PCMLTFA”) and related regulations. The program must include a risk assessment of the business that documents the risk of a money laundering offense or a terrorist activity financing offense occurring in the course business activities, written compliance policies and procedures that are kept up to date, and a compliance training program for employees, agents, or authorized persons.
  2. Monitor Adherence to Regulations: Compliance managers must ensure that MSBs follow all regulatory requirements set by the Financial Transactions and Reports Analysis Centre of Canada (FINTRAC). To achieve this, compliance managers should conduct quarterly and annual reviews to monitor adherence to rules and regulations, identify and assess potential risks and develop plans to minimize or eliminate them and work with upper management to address ethical violations or compliance issues and find solutions.
  3. Stay Up to Date with Laws and Regulations: Compliance managers should stay informed of any new or updated regulatory requirements and make sure that the MSB complies with these requirements. This includes ongoing research to keep up with any changes in the industry, and regularly reviewing the company’s compliance program to make sure that it stays up-to-date and relevant.
  4. Report on Compliance: Compliance managers are responsible for preparing and submitting reports on compliance to the relevant regulatory bodies. This includes a plan for how the compliance program will be reviewed and tested for its effectiveness, which must be reviewed and tested at least every two years.
  5. Risk assessment: A compliance manager is responsible for conducting a risk assessment of the company’s operations and identifying potential areas of non-compliance. This involves examining the company’s internal policies, procedures, and controls, as well as external factors such as regulatory requirements and industry best practices. Based on this assessment, the compliance manager develops strategies and programs to ensure that the company complies with relevant laws and regulations.
  6. Research: Compliance managers must stay current with the latest laws, regulations, and industry best practices to ensure that their company is in compliance with all relevant requirements. They must be able to conduct research and analyze complex legal and regulatory issues to determine their implications for the company. Overall, research is a critical skill for compliance managers, as it enables them to stay informed about changes in the regulatory environment and proactively identify potential compliance risks.
  7. Employee compliance training: In addition to keeping up with the latest developments, compliance managers must also be able to communicate this information effectively to others within the company. This may involve translating complex legal or regulatory concepts into plain language that is easily understood by employees at all levels. The compliance manager may also be responsible for developing and delivering training and education programs to ensure that employees are aware of their responsibilities and how to comply with relevant laws and regulations. 
  8. Conducting internal audits: Compliance managers conduct internal audits to ensure that the company is following its compliance program and identifying any weaknesses that need to be addressed. They use the results of the audits to make recommendations to management on how to improve the program and reduce the risk of non-compliance.
  9. Managing external audits: In addition to internal audits, compliance managers also manage external audits from FINTRAC or other regulatory agencies. They prepare the necessary documentation, coordinate with other departments, and ensure that the company is fully compliant with all regulatory requirements.
  10. Responding to regulatory inquiries: Compliance managers are responsible for responding to any regulatory inquiries related to the company’s compliance program. They provide documentation and other evidence to demonstrate that the company is following its program and complying with all relevant regulations.

What are the eligibility criteria for a compliance Manager in a Canada MSB? 

  • In Canada, there are no specific educational requirements for becoming a compliance manager in an MSB. However, most employers prefer candidates who have a bachelor’s degree in a relevant field such as business, finance, accounting, or law. Additionally, a candidate with relevant certification in compliance, such as a Certified Anti-Money Laundering Specialist (CAMS) or the Certified Risk and Compliance Management Professional (CRCMP), would be preferred by most employers.
  • Experience is also an important factor in becoming a compliance manager/officer. Employers typically prefer candidates who have at least 2-5 years of experience working in a relevant field, such as banking, finance, accounting, or law. Experience working in compliance or risk management is particularly valuable.
  • A compliance officer must have a deep understanding of the regulatory environment in which they operate. In the case of Canadian MSBs, a strong understanding of the Proceeds of Crime (Money Laundering) and Terrorist Financing Act (the “PCMLTFA”) and related regulations is essential. Therefore, a candidate with experience working in the financial services industry, particularly in areas such as risk management or regulatory compliance, would be well suited for a compliance officer role in an MSB. Additionally, having experience working with FINTRAC or other regulatory agencies would be an added advantage
  • Strong analytical skills, attention to detail, and excellent communication skills are also essential for a compliance officer in Canadian MSBs. They must be able to understand complex regulations and communicate them effectively to other stakeholders within the organization. Additionally, they must be able to identify potential compliance risks and work with other departments to implement policies and procedures to mitigate those risks. 

Our services

  • Tetra Consultants understand that registering as a money services business (MSB) in Canada and recruiting a compliance officer can be complex and time-consuming processes. That is why we offer comprehensive services to assist with both of these critical steps. Our team of experienced consultants can guide you through the process of Canada company registration and MSB license application, ensuring that you comply with all relevant regulations and requirements. We can help you determine whether your business qualifies as an MSB, and we will work with you to prepare and submit all necessary documentation to the Financial Transactions and Reports Analysis Centre of Canada (FINTRAC). With our assistance, you can streamline the registration process and start operating as an MSB as quickly as possible.
  • With the registration of Canadian MSB, it is essential to have a strong compliance program in place. That is where our recruitment services come in. We can help you find and hire a skilled and experienced compliance officer who can develop and implement an effective compliance program tailored to your business. Our team can assist with all aspects of the recruitment process, from creating job descriptions to interviewing and vetting candidates. We will work closely with you to ensure that the compliance officer we help you select has the skills and experience necessary to meet your business’s specific compliance needs. Our comprehensive service package not only includes assistance with payment licenses like Canada MSB but also corporate bank account opening, nominee director services, as well as annual accounting and tax assistance for your Canadian MSB. 
  • By working with us, you can rest assured that your MSB registration and compliance officer recruitment processes will be handled efficiently and effectively. Our goal is to help you achieve compliance with Canadian regulations and operate your MSB with confidence. So, what are you waiting for? Contact us to find out more about the process of starting a money service business in Canada, and our dedicated and experienced team will respond within the next 24 hours.

Tetra Consultants

Tetra Consultants is the consulting firm that works as your advisor and trusted partner in your business expansion. We tell our clients what they need to know, instead of what they want to hear. Most importantly, we are known for being a one-stop solution for our valued clients. Contact us now at enquiry@tetraconsultants.com for a non-obligatory free consultation. Our team of experts will be in touch with you within the next 24 hours.

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