What is an MSB under FCA regulation?

An MSB (Money Services Business) under FCA regulation is a business that provides one or more of the regulated MSB activities such as foreign exchange, money remittance, operating payment accounts, or other similar services, and is subject to certain regulatory and licensing obligations.

What are the key FCA requirements for MSB authorisation?

Key requirements typically include a robust AML/CTF policy, risk assessments, governance structure, fit & proper persons, financial resources, procedures for customer due diligence and sanctions screening, internal controls, and compliance with ongoing reporting obligations.

How long does the FCA MSB authorisation application take?

The timeline depends on the completeness of the application, complexity of business model, responsiveness to FCA feedback, and whether all required controls and documentation are in place. It can take several months.

What AML/CTF obligations must an MSB fulfil for FCA authorisation?

These include customer due diligence (KYC/KYB), risk-based approach to transaction monitoring, sanctions screening, reporting suspicious activity, maintaining policies and procedures, ongoing staff training, record keeping, and regular risk assessments.

What happens after the MSB authorisation is granted?

Once authorised, the MSB must maintain ongoing compliance including periodic reporting, monitoring of risk and AML controls, internal audits, updates to policies as regulations evolve, training, and responding to regulatory reviews or inspections.

MSB FCA Authorisation | Licensing & Compliance Support

Overview

MSBs are regulated under the Money Laundering Regulations 2017 and include currency exchange, money transmission, and cheque cashing.

Authorisation Process:

HM Revenue & Customs (HMRC) MSB Registration: Initial step before FCA authorisation; includes AML supervision.
AML/CFT Framework: Prepare risk-based AML policies, Know Your Customer (KYC) onboarding, and transaction monitoring procedures.
AML/CFT Framework: Prepare risk-based AML policies, Know Your Customer (KYC) onboarding, and transaction monitoring procedures.
Business Plan & Volume: Forecast transaction volumes, counterparties, correspondent banking relationships.
Systems & Controls: Establish IT systems for AML monitoring and safeguarding of customer funds.
FCA Application: Form submission, control documents, governance structure, and financial data.
FCA Interview/Review: May involve assessment of AML officer competence and business model robustness.
Ongoing Requirements: Annual AML audits, Suspicious Transaction Report (STR) filings, and periodic updates to FCA.

Overview

Authorisation Process:

We cover the following areas under Money Service Business (MSB):