Registration as an MSB
Persons (See 31 C.F.R. Â§ 103.11(z)) defined as money services businesses (31 C.F.R. Â§ 103.11(uu)) and acting as principals, generally are required to register with the Financial Crimes Enforcement Network whether or not they are licensed as money services businesses by any state.
Initial registration is accomplished by filing FinCEN Form 107, Registration of Money Services Business, and checking box 1a, initial registration. (Note the last sentence began with the word “initial”. MSBs must periodically renew their registration with FinCEN.)
At the present time, the following money services businesses are not required to register:
- A business that is a money services business solely because it serves as an agent of another money services business. For purposes of the MSB registration requirement, an agent is a business that an issuer authorizes, through written agreement or otherwise, to sell its instruments or, in the case of funds transmission, to sell its send and receive transfer services.
- A business that is a money services business solely as an issuer, seller, or redeemer of stored value; and
- The U.S. Postal Service and agencies of the United States, of any State, or of any political subdivision of any State.
In addition, currently a branch office of a money services business is not required to file its own registration form.
A business operating as a principal MSB is expected to file the registration form within 180 days after the date the business is established. There are significant penalties that may be imposed upon businesses acting as a principal MSB that fail to register and comply with the Bank Secrecy Act.
If your business performed transactions as an MSB in ignorance of the law, it is important that actions be taken promptly to come into compliance. The business may either:
- Make a documented decision to cease being an MSB and implement policies and procedures sufficient to prevent further transactions that fall within the definition of an MSB; or,
- Register as an MSB and then take the additional steps necessary to come into compliance.