Application of the Definition of Money Transmitter to Brokers and Dealers in Currency and Other Commodities

FinCEN clarifies that a broker or dealer in currency or other commodities is not a money transmitter when it accepts and transmits funds solely to effect a bona fide purchase or sale of those assets for a customer, as such transmission is an integral part of the underlying transaction. However, entities acting as money transmitters solely as agents of another money transmitter are exempt from the registration requirement but remain subject to other money services business regulations. If a broker or dealer transfers funds between a customer and a third party not involved in the commodity transaction, it may be engaged in the business of transferring funds and thus classified as a money transmitter subject to registration.

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Guidance
FIN-2008-G008
Issued: September 10, 2008
Subject: Application of the Definition of Money Transmitter to Brokers and Dealers in Currency and Other Commodities The Financial Crimes Enforcement Network (“FinCEN”) is issuing this interpretive guidance to clarify whether a person who conducts transactions in currency or other commodities is a money services business for purposes of complying with the Bank Secrecy Act and its implementing regulations. Specifically, this guidance addresses whether a broker or dealer in currency or other commodities1 is a money transmitter when, in the ordinary course of business, the broker or dealer accepts and transmits funds2 in order to effect transactions in currency or other commodities for or with a customer.3 Whether a person is a money transmitter is a matter of facts and circumstances.4

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Lineage: In force

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Source: Financial Crimes Enforcement Network — original document · Summary generated with machine assistance and reviewed before publication; the authoritative text is the regulator's original document. How RegAlert works