Canada: fintech & payments regulation

FINTRAC

Primary supervisor for AML/CTF compliance and registration of Money Services Businesses (MSBs) and virtual currency exchanges.

Canadian Securities Administrators (CSA)

National body coordinating provincial securities regulators; issues regulations (e.g., Reg 31-103) and policy statements for securities dealers, investment fund managers, and crowdfunding portals.

Autorité des marchés financiers (AMF)

Provincial securities regulator for Quebec; enforces registration requirements and oversees market integrity within its jurisdiction.

Proceeds of Crime (Money Laundering) and Terrorist Financing Act (PCMLTFA) (2000)

Federal legislation requiring MSBs to register with FINTRAC, maintain records, and report suspicious transactions. Violations result in administrative monetary penalties.

Regulation 31-103 Respecting Registration Requirements, Exemptions and Ongoing Registrant Obligations (2023)

National securities regulation establishing registration categories, proficiency requirements, and ongoing obligations for dealers and advisers. Includes prohibitions on chargebacks and mandates for vulnerable client protection.

Regulation 45-110 respecting Start-up Crowdfunding Registration and Prospectus Exemptions (2021)

Establishes a prospectus exemption for start-up crowdfunding and defines operational requirements for funding portals, allowing issuers to raise up to $1.5 million annually.

Money Services Business (MSB) / Virtual Currency Exchange

Mandatory registration with FINTRAC is required for entities dealing in virtual currencies or traditional money services. Failure to register or comply with AML/CTF rules leads to significant penalties.

Securities Dealer / Investment Fund Manager

Firms and individuals must register with provincial securities commissions (e.g., as an investment dealer, mutual fund dealer, or adviser). The transition to the Canadian Investment Regulatory Organization (CIRO) as the self-regulatory organization is complete. Timeline: CIRO transition completed by July 2026 for remaining categories.

Funding Portal

Specialized registration for platforms facilitating start-up crowdfunding under Regulation 45-110.

Prohibition on chargebacks for investment fund distribution to eliminate conflicts of interest.

Mandatory protection measures for older and vulnerable clients, including obtaining trusted contact persons and allowing temporary holds on transactions.

Strict AML/CTF reporting obligations for MSBs, including registration renewal and transaction reporting.

Regulators are focusing on enhancing transparency in investment fund costs and strengthening dispute resolution mechanisms, including binding independent dispute resolution services.

Continued enforcement of AML/CTF regulations against crypto-asset service providers, with significant penalties imposed for non-compliance.