Money Services Business (MSB) Registration

NOTICE: On February 24, 2012, the Financial Crimes Enforcement Network (FinCEN) issued a final notice requiring the electronic filing of most FinCEN reports by July 1, 2012. Institutions are strongly encouraged to begin using the BSA E-Filing System as soon as possible. For more information about mandatory E-Filing, please see our Frequently Asked Questions (FAQs). 

With few exceptions, each money services business (MSB) must register with the Department of the Treasury. A person that is an MSB solely because that person serves as an agent of another MSB is not required to register.

Registration of an MSB is the responsibility of the owner or controlling person of the MSB and must be filed by the registration deadline. The form, Registration of Money Services Business, FinCEN Form 107, must be completed and signed by the owner or controlling person and filed within 180 days after the date on which the MSB is established.

Registration must be renewed every two years. Re-registration is required in limited circumstances.

A copy of the filed registration form and other supporting documentation must be retained at a location in the United States for a period of five years.

Penalties. Civil and criminal penalties may be imposed for violation of the registration requirement.

• Registration Form
• FinCEN Announces Electronic Filing For MSB Registrations
• Regulation
• Fact Sheet

This guidance is intended to clarify general issues arising under 31 CFR Chapter X (formerly 31 CFR Part 103). The guidance does not replace or supersede the regulations.

Responsibility

Any person who owns or controls an MSB is responsible for registering the business. If more than one person owns or controls the MSB, the owning or controlling persons may enter into an agreement designating one of them to register the business. The failure of the designated person to register the MSB, however, does not relieve any of the other persons who own or control the business of the liability for the failure to register the MSB.

31 CFR 1022.380(c) (formerly 103.41(c))

Person

A "person" is an individual, a corporation, a partnership, a trust or estate, a joint stock company, an association, a syndicate, joint venture, or other unincorporated organization or group, an Indian Tribe (as that term is defined in the Indian Gaming Regulatory Act), and all entities cognizable as legal personalities. 31 CFR 1010.100(mm) (formerly 31 CFR 103.11 (z))

Owner or Controlling Person

Owner or Controlling Person - An owner or controlling person includes the following:

MSB is a Public Corporation. If the MSB is a public corporation, a duly authorized officer of the public corporation may register the MSB and may sign the form on behalf of the corporation.

Multiple Owners/Controlling Persons. If two or more persons own equal numbers of shares of an MSB that is a corporation, those persons may enter into an agreement designating one of them to register the MSB.

Owner/Controlling Person is a Corporation. If the owner or controlling person is a corporation, a duly authorized officer of the owner-corporation may sign the form on behalf of the owner-corporation.

Solely because that person serves as an agent of another MSB

A person that is an MSB solely because that person serves as an agent of another MSB is not required to register. However, a person that is an MSB both because it engages in MSB activities on its own behalf and as an agent of another MSB must register.

Example: A supermarket corporation that acts as an agent (as a seller of money orders) for an issuer of money orders, and performs no other services of a nature and amount that would cause the supermarket corporation to be a money services business, is not required to register. The result is the same if the supermarket corporation serves as an agent for two or more MSBs. Thus, if the supermarket corporation serves as an agent both of a money order issuer and of a money transmitter, it is not required to register. However, registration is required if the supermarket corporation --in addition to acting as an agent of a money order issuer --cashed checks or exchanged currency (other than as an agent for another MSB) in an amount greater than $1,000 for any person on any day in one or more transactions.

31 CFR 1022.380(a)(2) (formerly 103.41(a)(2))

Registration deadline

For any person that becomes an MSB after December 31, 2001, the deadline for initial registration is the end of the 180-day period beginning on the day following the date the business is established.

31 CFR 1022.380(b)(3) (formerly 103.41(b)(3))

Registration Form

Registration Form - Each MSB must initially be registered by filing a completed form, FinCEN Form 107, Registration of Money Services Business, within 180 days after the date on which the MSB is established

One Form for each MSB
Only one registration form is required to be filed for each MSB in any registration period.

Structure and Ownership
One form is required regardless of the manner in which the MSB business is structured, e.g. as a sole proprietorship (individual owner), as a partnership (partner owners), as a corporation (shareholder owners) or other structure.

Branches
One form is required regardless of the number of branches or branch offices at which MSB services are offered by the MSB. However, the number of branches must be reported on the form.

Agents
One form is required regardless of the number of agents the MSB has authorized to sell or distribute its MSB services. However, the number of agents must be reported on the form.

The term "MSB services" refers to the following financial products and services: money orders, traveler's checks, money transmission, check cashing, currency exchange and currency dealing.

Renew

After an MSB completes its initial registration, the form to renew its registration must be filed by December 31 of the second calendar year preceding the 24-month renewal period and is accomplished by filing the Registration of Money Services Business Form, FinCEN Form 107. Thereafter, registration renewal must be filed every 24 months by December 31.

31 CFR 1022.380(b)(2) (formerly 103.41(b)(2))

Re-Register

Re-register means to re-file a registration form (with information different from that reported on the form originally filed) during the initial registration period (before the deadline for renewal) because an event triggering re-registration has occurred. An MSB must be re-registered when any of the following events occurs during a registration period:

• Change in Ownership or Control under State Law. There has been a change in ownership or control of the MSB that requires the MSB to be re-registered under State law.
• Transfer of Voting Power or Equity Interest. More than 10 percent of the voting power or equity interest of the MSB has been transferred (except MSBs that must report such transfer to the Securities and Exchange Commission);
• Increase in the Number of Agents. The number of agents of the MSB has increased by more than 50-percent.

To re-register, FinCEN Form 107 must be completed and filed not later than 180 days after the date the triggering event occurs.

The calendar year in which the triggering event occurs is treated as the first year of a new 2-year registration period.

31 CFR 1022.380(b)(4) (formerly 103.41(b)(4))

Supporting Documentation Definitions

Certain information in support of the filed registration form must be retained at a location in the United States for a period of five years.

That information includes:

1. Form. A copy of the filed registration form.
2. Estimate of Business Volume. Estimate of the business volume of the MSB for the coming year.
3. Ownership or Control. Information with regard to the ownership or control of the MSB.
4. Agent List. A listing of agents that the MSB has authorized to sell or distribute its MSB services.
   
   31 CFR 1022.380(b)(1)(iii), (d) (formerly 31 CFR 103.41(b)(1)(iii), (d)), Form Instructions

Location in the United States

Supporting documentation must be maintained at a location in the United States. The location must be reported on the registration form and must be either the address of the MSB reported on the form (in Part I, Registrant Information) or another address reported on the form (in Part V, Location of Supporting Documentation).

31 CFR 1022.380(d)(1) (formerly 103.41(d)(1))

Penalties

Civil penalty. Any person who fails to comply with the registration requirements may be liable for a civil penalty of up to $5,000 for each violation. Failure to comply includes the filing of false or materially incomplete information. Each day a violation continues constitutes a separate violation. In addition, the Secretary of the Treasury may bring a civil action to enjoin the violation.

Criminal penalty. It is unlawful to do business without complying with the registration requirements. A criminal fine and/or imprisonment for up to 5 years may be imposed.

31 CFR 1022.380(e) (formerly 31 CFR 103.41(e)), 18 USC 1960

MSB Exceptions

Exceptions - Certain MSBs are not required to register:

Solely an agent. - A person that is an MSB solely because that person serves as an agent of another MSB is not required to register. However, a person that is an MSB both because it engages in MSB activities on its own behalf and as an agent of another MSB, must register.

U.S. Postal Service.

Government Agencies. Agencies of the United States, of any State, or of any political subdivision of any State.

Note: A person that is not an MSB is not required to register.
31 CFR 1022.380(a)(1) and (2) (formerly 31 CFR 103.41(a)(1) and (2))

Money Services Business Definition

The term "money services business" includes any person doing business, whether or not on a regular basis or as an organized business concern, in one or more of the following capacities:

1. Currency dealer or exchanger.
2. Check casher.
3. Issuer of traveler's checks, money orders or stored value.
4. Seller or redeemer of traveler's checks, money orders or stored value.
5. Money transmitter.
6. U.S. Postal Service.

An activity threshold of greater than $1,000 per person per day in one or more transactions applies to the definitions of: currency dealer or exchanger; check casher; issuer of traveler's checks, money orders or stored value; and seller or redeemer of travelers' checks, money orders or stored value. The threshold applies separately to each activity -- if the threshold is not met for the specific activity, the person engaged in that activity is not an MSB on the basis of that activity.

No activity threshold applies to the definition of money transmitter. Thus, a person who engages as a business in the transfer of funds is an MSB as a money transmitter, regardless of the amount of money transmission activity.

Notwithstanding the previous discussion, the term "money services business" does not include:

• A bank, as that term is defined in 31 CFR 1010.100(d) (formerly 31 CFR 103.11(c)), or
• A person registered with, and regulated or examined by, the Securities and Exchange Commission or the Commodity Futures Trading Commission.

For the complete regulatory definition of "money services business", see 31 CFR 1010.100(ff) (formerly 31 CFR 103.11(uu)).

Note: Each money services business (MSB) is a financial institution. For the regulatory definition of "financial institution," see 31 CFR 1010.100(t) (formerly 31 CFR 103.11(n)).

Financial Institution Definition

Financial Institution - A "financial institution" includes any person doing business in one or more of the following capacities:

(1) bank (except bank credit card systems); 
(2) broker or dealer in securities; 
(3) money services business;
(4) telegraph company;
(5) casino;
(6) card club;
(7) a person subject to supervision by any state or federal bank supervisory authority.

For the regulatory definition of "financial institution," see 31 CFR 1010.100(t) (formerly 31 CFR 103.11(n)).