Recent Changes and Developments in FINTRAC’s Approach to Granting MSB Authorization in Canada

Obtaining an MSB (Money Services Business) authorization in Canada has traditionally been considered one of the most predictable and “transparent” registration processes in the fintech sector – without licensing fees, without minimum capital requirements, with a clear and publicly accessible procedure through the online portal FINTRAC. That is why Canada has remained an attractive jurisdiction for companies working with money transfers, currency exchange operations, and crypto assets for years. However, it has been less popular than traditional European jurisdictions.

However, starting in 2025, the situation has changed. The Canadian regulator – the Financial Transactions and Reports Analysis Center of Canada (FINTRAC) – has faced a very large influx of new applications for obtaining MSB authorization. There have been many more applications than before, and our Manimama Law Firm team has already written about this in detail in its material about the Canadian MSB, which lists the main factors behind this surge in demand.

FINTRAC has not issued any official legislative updates or public policy statements in the first half of 2026. Formally, the rules of the game have remained the same. However, in our daily work with clients, we see that the regulator’s actual approach to reviewing applications and supporting already issued authorizations has changed significantly. In this article, we will analyze these changes in detail — what exactly has changed, why it happened, and what it means for businesses that are planning to obtain or already have an MSB/FMSB authorization.

Why is it worth following FINTRAC’s practices at all, and not just the law?

One common myth in the business environment is that it is enough to read the text of the Proceeds of Crime (Money Laundering) and Terrorist Financing Act (PCMLTFA) and the registration requirements once, and that this completes the preparation for submitting the application.

In practice, this is not the case. FINTRAC, like most financial regulators, exercises its powers not only through the text of the law, but also through:

internal (not always public) work instructions and procedures for employees involved in the consideration of applications (the existence of such procedures was separately confirmed by FINTRAC support service to our lawyers during a telephone conversation);
clarification requests, the content and scope of which may vary depending on the applicant’s profile;
the practice of compliance checks of already registered MSBs;
the pace and priority of processing applications depending on the regulator’s workload.

That is why the changes described below will not necessarily be reflected in an official press release or other legislative update – they are visible only to those who directly accompany clients in the process of submitting and maintaining MSB authorization.

Change №1: Сonfirmation of a real place of business in Canada.

Why Has This Become an Issue?

FINTRAC officially distinguishes between two types of entities: an MSB (a company with a physical presence in Canada) and an FMSB (Foreign MSB), a foreign company that does not have a place of business in Canada but directs its services to Canadian clients. Both types are required to register with FINTRAC and meet the same compliance requirements, but the status – MSB or FMSB – determines what documents and confirmations the regulator will require.

Previously, the line between “I have a place of business in Canada” and “I do not, but I work with Canadian clients as an FMSB” was rarely checked in depth in practice. Now the situation has changed dramatically: FINTRAC is requesting confirmation of a real place of business in Canada much more often and more insistently – and this applies not only to new applicants, but also to companies that already have a valid authorization.

What exactly does FINTRAC consider confirmation?

Based on the practice of the regulator’s recent requests, it is possible to single out a list of evidence that FINTRAC considers confirmation of a real presence in Canada:

documented legal and physical address in Canada (not a PO Box or the address of a registered agent without real activity);
confirmation of the availability of office space – lease agreement, utility bills for the company;
confirmation of the availability of employees or agents who actually physically work in Canada (employment contracts, pay slips, proof of payment of payroll taxes);
operational evidence of conducting business specifically from a Canadian jurisdiction – bank accounts in Canadian institutions, a real client base in Canada, local accounting and tax reporting.

Simply put: the regulator is no longer satisfied with the formal registration of a legal entity in Canada without any traces of real operational activity in its territory.

What happens if a company does not respond to a request?

There are already specific cases where FINTRAC has asked questions about the place of business of an already authorized Canadian MSB – and if the company did not provide an answer or evidence, this led to the cancellation of its registration.

This is directly consistent with FINTRAC’s official position: a company’s registration is considered revoked if it did not respond to a clarification request from the regulator, did not cooperate with FINTRAC in the verification process, or was found not to meet the registration criteria. That is, the cancellation of authorization due to ignoring the request for a place of business is not hypothetical, but a very real and already used scenario in practice.

What about new applicants who are still in the queue?

For new applicants who have submitted documents and are awaiting a decision, the situation is not uniform: not all, but in most cases, FINTRAC now additionally requests confirmation of the place of business at the stage of consideration of the application, before making a final decision on registration. In practice, this means that applicants should prepare the appropriate package of evidence in advance, rather than waiting for the regulator to ask for it separately. Each additional request for clarification means additional weeks, and sometimes months of waiting. According to our internal observations, among the clients we have supported over the past three months, FINTRAC requested confirmation of the place of business in approximately 70% of cases.

Change №2: Тhe registry is updated once a month, not in real time

What is the essence of the change?

The second important point, which is now explicitly stated in the authorization decisions, concerns the fact that the official MSB register is updated only once a month – usually at the end of the month.

In the new decisions on the issuance of MSB authorization, FINTRAC now specifically states that, to obtain the MSB number, the date of issuance of the authorization and the date until which it is valid, it is necessary to wait until the register is updated. That is, issuing the authorization and the full reflection of all data on it in the public register are two different points in time, and a significant gap may pass between them.

What does this look like in practice?

A case in point is the situation of one of our clients: the company received authorization in mid-June, but all the full details of this registration (MSB number, exact dates of issue and validity) became available in the public register only at the end of the month, when another scheduled update took place.

This means that businesses that plan to start operating immediately after receiving authorization — for example, opening a bank account or concluding an agreement with a payment provider — should take this time gap into account in their planning. Counterparties and banks often check the company’s status in the public register, and not only based on a letter from the regulator.

Changing the communication format with the regulator

In parallel, the format of official communication itself has changed. Previously, after receiving authorization, companies could expect a separate confirmation letter via the PSP Connect platform – an electronic document that officially recorded the fact of registration. Now such separate letters confirming authorization are no longer prepared and sent. Confirmation of a positive decision on registration is currently provided only in the format of a general letter, which is sent to the email address of the contact person who corresponded with the regulator during the application process.

Instead, all official communication with representatives of the regulator takes place via a secure messaging platform (known in the industry by an abbreviated name such as “PSP Connect” by analogy with the official FINTRAC document exchange system). All official messages are sent exclusively to the email address from which the application for registration was submitted, i.e., to the email of the company representative, and not to the general corporate address or the address of the legal advisor, unless it was separately indicated as a contact.

Practical conclusion for businesses: it is important that the email address provided when submitting the application remains active and is regularly checked by the responsible person even after the registration process is complete – this is where all subsequent requests will be sent, including those related to the verification of the place of business described above. This approach also allows for more efficient redistribution of human resources within the company.

Why FINTRAC is changing its approach now: three key reasons

Summing up both changes, a common denominator can be identified – all of this is a way for FINTRAC to correctly allocate its resources in the face of a sharp increase in the number of applications. Namely:

First, the implicit FATF requirements for a more stringent approach to issuing MSB authorizations force the regulator to pay more attention to verifying each application, not just the formal completeness of the submitted documents.

Second, FINTRAC now has stricter internal requirements for confirming the place of business in Canada for non-foreign MSBs – that is, the regulator is systematically trying to separate companies with a real Canadian presence from those that are only formally registered.

Third, the regulator is reallocating its resources, including human resources, to speed up the processing of a significantly increased queue of applications. Moving to monthly (rather than real-time) registry updates and centralized communication through a single platform is essentially a way to reduce the administrative burden on employees who previously spent time preparing separate confirmation letters for each company.

Are there any visible results of these changes yet?

According to our observations, since the end of June 2026, there has been slight progress in the speed of issuing authorizations. The backlog of applications accumulated during 2025 and early 2026 is gradually decreasing. However, it is still too early to talk about a full return to the previous (pre-COVID and pre-crisis) processing times.

Typical mistakes of applicants in the new conditions

In practice, we see that most delays and even refusals are not related to the fundamental non-compliance of the business with the MSB criteria, but to the following typical mistakes:

The lack of pre-prepared evidence of the actual place of business in Canada or abroad – the company prepares them only after receiving the request, losing additional weeks;
Ignoring or late response to a request for clarification from FINTRAC, which for already registered MSBs can lead to cancellation of registration;
Using an inactive or rarely checked email address specified when submitting an application, due to which the company misses important messages from the regulator;
Expecting that the date of issuance of authorization automatically means immediate availability of full data in the public register, without taking into account the monthly update cycle;
Underestimating the difference between the status of MSB and FMSB and the corresponding requirements for each of them.

Practical checklist for applicants in 2026

Before applying for MSB or FMSB authorization or in the process of maintaining an existing registration, you should:

Preliminarily collect a package of documents confirming the actual place of business in Canada (address, lease agreement, evidence of employees or agents, local reporting) – even if the regulator has not yet sent a corresponding request;
Determine your status – MSB or FMSB – and understand what requirements apply to it;
Ensure regular monitoring of the email and PSP Connect service specified when submitting the application, including the spam folder, since official messages now only arrive there;
Promptly and fully respond to any requests for clarification from FINTRAC, without delaying the response even in the absence of a complete package of documents at the time of the request;
Take into account the monthly registry update cycle when planning the date of commencement of operations, opening a bank account or concluding agreements with counterparties;
If you already have a valid authorization, do not ignore any incoming requests from the regulator, even if it seems that the company has already fulfilled all the initial requirements for registration.

Conclusion

Formally, Canadian legislation on MSB authorization did not change during the first half of 2026. However, in practice, FINTRAC significantly strengthened its approach to verifying the actual place of business, changed the format and frequency of updating the public register, and centralized communication with applicants through a single platform. All of these changes are a direct result of the sharp increase in the number of applications, pressure from FATF recommendations, and the need for the regulator to allocate its own resources more rationally.

For businesses, this means one thing: the “apply and wait” approach no longer works as before. Successfully and quickly obtaining MSB authorization in the new conditions requires early preparation of evidence of a real presence in Canada, careful monitoring of communication with the regulator, and understanding the new timeframe for updating the register.

If you are planning to apply for MSB or FMSB authorization in Canada, have already encountered a FINTRAC inquiry regarding the place of business, or your registration has been canceled. If you want to appeal this decision, the Manimama Law Firm team is ready to conduct a full legal and compliance analysis of your situation, prepare the necessary package of documents, and support communication with the regulator in a way that minimizes risks to your business.