Federal Registration of Money Services Businesses (MSB)
Beyond state-level licensing, various Money Services Businesses (MSBs) must also comply with federal registration obligations under the Bank Secrecy Act (BSA). These businesses are required to register with the Financial Crimes Enforcement Network (FinCEN) within 180 days of beginning operations and, once registered, must maintain and annually update a current roster of their agents.
A business qualifies as an MSB – and therefore must register with FinCEN –if it performs any of the following functions: issuing or selling money orders; issuing or selling traveler’s checks; transmitting funds in any amount; cashing checks of more than $1,000 for a single customer in a single day; engaging in currency exchange or dealing above $1,000 per customer per day; or issuing, selling, or redeeming stored-value products when those activities accompany any of the foregoing services.
Businesses that act exclusively as agents for another MSB are not required to register, nor are the U.S. Postal Service and government entities.
Documents & Compliance
Documents needed for registration
Federal registration as a Money Services Business (MSB) with the Financial Crimes Enforcement Network (FinCEN) is a distinct requirement from state licensing. While the primary submission is the registration form itself, FinCEN mandates the retention of specific supporting documentation for a period of five years. This information must be maintained at a location within the United States.
Here's a breakdown of the required documentation and information you must retain:
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Registration Form: A complete copy of the FinCEN Form 107, "Registration of Money Services Business," as filed with the IRS Detroit Computing Center (DCC). This form is the core document for your federal registration.
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Estimate of Business Volume: Documentation providing an estimate of your MSB's projected business volume for the upcoming year. This helps FinCEN understand the scale of your operations.
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Ownership or Control Information: Detailed information regarding the individuals or entities that own or control your MSB. This typically includes identifying information for beneficial owners and those with significant control.
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Agent List: A comprehensive listing of all agents that your MSB has authorized to sell or distribute its money services. This list must be updated annually and typically includes the agent's name, address, telephone number, types of services provided, gross transaction amounts, and the depository institution where they maintain a transaction account for MSB funds.
These requirements are outlined in 31 CFR 1022.380(b)(1)(iii) and (d), and in the instructions accompanying the FinCEN registration form. Our firm assists in ensuring you meet both the registration and record-keeping obligations to remain compliant with federal regulations.
Anti-Money Laundering Policies & Compliance
Regulatory compliance is a fundamental aspect of establishing and operating a financial institution. Our services focus on creating and implementing the comprehensive policies necessary to satisfy the rigorous requirements set by regulatory authorities such as the New York Department of Financial Services (NYDFS) and the Financial Crimes Enforcement Network (FinCEN). By taking a holistic approach, we help your business not only secure licensure but also maintain a strong framework to prevent illicit financial activity.
We assist in drafting the following key policies: Anti-Money Laundering (AML) / Bank Secrecy Act (BSA) Policy: This essential policy is designed to protect your business from money laundering and terrorist financing risks. It includes procedures for customer due diligence, monitoring and reporting suspicious activities, and recordkeeping in compliance with state and federal regulations. Policies are tailored to your business model and risk profile to ensure adherence to New York’s Part 416 rules and federal BSA requirements.
Know Your Customer (KYC) Program: As a critical component of the AML framework, a KYC program establishes procedures for verifying customer identities, understanding their business activities, and assessing risk profiles. This includes identifying beneficial owners and performing ongoing monitoring of accounts.
Transaction Screening and Filtering Program: Required under New York’s Part 504 regulations, this program ensures that transactions are screened against sanctions lists, including those maintained by the Office of Foreign Assets Control (OFAC). We draft policies outlining screening procedures and steps to take when a potential match arises.
Information Technology (IT) Security Policy: To protect sensitive data and business systems, we draft IT security policies in accordance with Part 500 regulations. These policies address access controls, incident response, business continuity, and vendor management.
Agent and Correspondent Policies: For businesses that work with agents or correspondents, we prepare detailed policies covering agent selection, contracting, recordkeeping, remittance procedures, and compensation arrangements, meeting NYDFS standards.
Flow of Funds Structure: We provide a clear description of your business’s transaction flow, including a flowchart that details each step from customer interaction to final settlement, clarifying the roles and responsibilities of all parties involved.
We minimize your taxes domestically and internationally...
Viacheslav Kutuzov
VIACHESLAV KUTUZOV, Esq.
International and U.S. Taxation Expert
New York Tax Attorney & Counselor-at-Law (6192033)
55 Broadway, Floor 3, New York, New York 10006
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