Money service businesses (“MSBs”) will now have greater oversight by the British Columbia Financial Services Authority (“BCFSA”). On March 29, 2023, British Columbia put forward Bill 19 – 2023 Money Services Businesses Act (“Bill 19”) which aims to regulate MSBs at the provincial level. Bill 19 originated from recommendations of the Cullen Commission which found that more oversight of MSBs operations beyond that offered by the Financial Transactions and Reports Analysis Centre was necessary.

Overview of Bill 19

The Proceeds of Crime (Money Laundering) and Terrorist Financing Act (the “PCMLTFA”) governs MSBs on a federal level. If Bill 19 is passed, MSBs operating in British Columbia will be subject to an additional level of regulation.

The regulatory regime under Bill 19 would compliment and work in tandem with the PCMLTFA’s federal structure. A Superintendent under the BCFSA will be appointed and given powers of investigation, authorizing search and seizure, and issuing orders, similar to the federal Financial Transactions and Reports Analysis Centre of Canada.[1] The Superintendent’s administrative monetary penalties are aligned with the federal legislation, allowing the Superintendent to impose financial penalties of up to $100,000.[2]

Bill 19 has strayed from the federal MSBs structure with certain key differences. Bill 19 defines MSBs along the same lines as its federal counterpart, except for its omission of dealing in virtual currencies and crowdfunding platform services. One of the most significant difference between the provincial and federal MSBs regimes is the powers of the Superintendent to refuse an applicant’s registration.[3] Under Bill 19, the Superintendent has broad powers to refuse an applicant’s registration if “in the superintendent’s opinion, the applicant is unsuitable to be registered.”[4] Under the PCMLTFA, the powers to refuse registration are much more narrow, restricted to a list of circumstances and give applicants a wider berth to entry.[5]

The Cullen Report: a provincial rationale

In 2022, the British Columbia government released its final report, the Final Report of the Public Inquiry into Money Laundering in British Columbia (the “Cullen Report”), which investigated the issue of money laundering in the province. The Cullen Report gave dozens of recommendations for combatting money laundering, one of the recommendations being implementing a provincial MSB regulatory system.[6] The Cullen Report critiqued the federal MSB regime for its high bar for refusing registration, specifically criticizing that the federal legislation allows businesses with questionable practices or histories to gain access to a legitimizing system.[7] Providing the Superintendent with greater powers to refuse access may help protect the provincial MSBs registration from being used to legitimize corrupt actors. Ease of access into the federal MSBs registry is also negatively compounded by the Cullen Report’s finding that FINTRAC conducts very few examinations of MSBs within the first two years of registration.[8] The Cullen Report suggests that if examination occurred from the beginning then better practices of MSBs would be encouraged and offenders would be deterred and caught earlier on before they were able to cause greater havoc.[9]

Generally, the hope of Bill 19 seems to rely on the rationale that an independent regulatory system of oversight for the province can understand and meet the needs of the province more effectively than one stretched out across the nation.

Should you have any questions or concerns, please feel free to reach out to a member of Miller Thomson’s Structured Finance and Securitization group.


[1] Bill 19, 2023 Money Services Businesses Act, 4th Sess, 42nd Parl, British Columbia, 2023, cls 27-29.

[2] Ibid cls 34-37.

[3] Ibid cl 13.

[4] Ibid.

[5] Ibid cl 11.1.

[6] British Columbia, Commission of Inquiry into Money Laundering in British Columbia, Final Report of

the Public Inquiry into Money Laundering in British Columbia, by Austin F. Cullen, (June 2022) at 1039.

[7] Ibid at 1033.

[8] Ibid at 1029.

[9] Ibid.