The Canada MSB Forex Broker License Myth  

There has been much discussion in the past months surrounding Canadian forex broker license options, specifically what is referred to as a “Canada MSB forex broker license”. To the disappointment of our followers, we can state with confidence that there is no such thing as a Canada MSB forex license. 

Further to this topic, we’d like to dispel the myth concerning forex broker licenses in Canada. As we’ll outline, forex trading regulation in Canada doesn’t involve MSB companies.

The Canada MSB Does Not Regulate Forex Trading in Canada

It’s important to emphasize that a Canada MSB company is not to be seen as having the authority to offer derivative instruments to local or international clients. Instead, it is simply a registration for existing and legitimate businesses for the purpose of AML reporting. Those familiar with this type of registration in the Unisted States can compare Canada MBS registration with FinCEN, which performs very similar activity. Because most regulatory bodies are often associated with 3 to 4 letter acronyms, on first glance it this can be deceiving because MSB sounds like a legitimate regulator of FX activity. 

What is the Canada MSB?

MSB stands for Money Services Businesses. In Canada, the Financial Transactions and Reports Analysis Centre or FINTRAC for short is the authority responsible for the registration of the aforementioned Money Services Businesses (MSB).

Simply put, any business in the world can register as a Canada MSB as long as the necessary criteria are met. The Financial Transactions and Reports Analysis Centre of Canada (FINTRAC) hosts this registration on the Money Services Businesses (MSB) section of their website. With that said, there are no advantages for unlicensed or start-up brokers to register a business with the Canada MSB unless they have an already legitimate authorization for the service and wish want to conduct business within Canada.

Canada MSB Registration Offers no Benefit to Forex Brokerages

A common theme in the past years has been the increased difficulty that forex brokers face when trying to secure bank accounts for their businesses. Unfortunately, registering your offshore brokerage with the Canada MSB will not increase the chances of securing a bank account. This is one of the main reasons we don’t find any particular value in Canada MSB registration. It’s important to bear in mind that the Canada MSB is not a financial services regulator; instead it is simply the registrar of businesses. 

Similar to establishing a company in St. Vincent and the Grenadines, a broker will receive nothing more than proof of registration from the Canada MSB. Canada does indeed have a regulatory framework for FX trading, however, it is very much based on specific provinces and similar to the United States is mostly focused on the local market. Without diving into too much detail, all licensed forex brokers must be approved by their SRO (self regulatory organization) the Investment Industry Regulatory Organization of Canada (IIROC) or obtain province specific authorizations to operate locally. Until regulations become more uniform in Canada, we don’t see particular value in focusing on regulation unless your broker intends on focusing solely on the local market in Canada. 

Beware of Consultants Promoting Canada MSB Forex Licenses!

Our team has successfully established forex broker licenses in a variety of global jurisdictions but you won’t find any mention of Canada on our website. The reason is that a Canada MSB registration doesn’t count as a forex broker license nor does it add any material value to your business.

Sadly, many financial consultants falsely advertise and promote this as a legitimate licensing option, often charging hefty fees for the service. Before spending thousands of dollars on MSB registration, feel free to contact us. We are more than happy to provide a professional opinion concerning any offer you may have received for a so called “Canada MSB Forex License.” 

Atomiq Consulting – Forex & CFD Regulation Expertise

If you would like to obtain a forex broker license in either any of the offshore or continental jurisdictions found around the globe, we are here to help.

To learn more about our services, explore the costs associated with a license, or to discuss basic questions about forex broker licensing, don’t hesitate to contact our team of experts today!

Have a look at some of the additional services our clients have found to be helpful in the growth of their business.

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