Regulatory Alerts2014-08-27
Application of Money Services Business Regulations to a Company Acting as an Independent Sales Organization and Payment Processor
The Financial Crimes Enforcement Network issued an administrative ruling determining that a company acting as an Independent Sales Organization and payment processor is not a money transmitter under the Bank Secrecy Act. FinCEN concluded that the company's ISO activities do not constitute money transmission because it never takes possession or control of merchant funds. However, the payment processor exemption only applies if disbursements are conducted exclusively through clearance and settlement systems admitting only BSA-regulated financial institutions, a condition requiring further verification.
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