How Canadian MSB Can Open RPAA-Compliant Accounts: Segregated, Trust, and Fiduciary Options for FINTRAC and Bank of Canada Compliance

As of March 2025, Money Services Businesses (MSB) in Canada must navigate a dual regulatory framework enforced by the Financial Transactions and Reports Analysis Centre of Canada (FINTRAC) and the Retail Payments Activities Act (RPAA), overseen by the Bank of Canada. Under RPAA, MSB offering retail payment services—such as money transfers, currency exchange, or cryptocurrency wallets—must safeguard client funds in segregated accounts, trust accounts, or fiduciary accounts. Simultaneously, FINTRAC mandates registration and compliance with anti-money laundering (AML) and counter-terrorism financing (CTF) rules. For MSB, this means partnering with financial institutions to open RPAA-compliant accounts that align with FINTRAC obligations.

1. FINTRAC Obligations
   FINTRAC regulates MSB under the Proceeds of Crime (Money Laundering) and Terrorist Financing Act (PCMLTFA). Any business providing currency exchange, money transfers, or virtual currency services must:
   • Register with FINTRAC (FINTRAC MSB Registration).
   • Implement AML/CTF programs, including KYC and suspicious transaction reporting.
   • Maintain transparent records, often requiring segregated accounts for client funds.
2. RPAA Requirements
   The Retail Payments Activities Act (RPAA), enforced by the Bank of Canada, applies to MSB classified as Payment Service Providers (PSPs). Key safeguarding rules (see RPAA, Section 9) include:
   • Holding client funds in segregated accounts for end-user funds, separate from operational capital.
   • Placing these funds in OSFI-regulated institutions (Bank of Canada RPAA Overview).
   • Ensuring liquidity and accessibility of end-user funds accounts.
   • Optionally using insurance or fiduciary accounts as alternative safeguards.

With RPAA implementation nearing completion by late 2025, MSB must secure safeguarding accounts or trust accounts for RPAA compliance while maintaining FINTRAC registration.

Opening safeguarding accounts, segregated accounts, trust accounts, or fiduciary accounts offers MSB more than compliance — it’s a strategic advantage:

• Regulatory alignment: Satisfy both FINTRAC and RPAA standards for seamless operations.
• Client trust: Safeguarding accounts protect funds in insolvency, enhancing credibility.
• New revenue streams: With RPAA-compliant segregated accounts, MSB can offer client wallets — akin to EMIs — supporting prepaid cards, digital payments, or crypto storage.
• Partnership leverage: Financial institutions favor MSB with trust accounts for end-user funds, simplifying negotiations for new payment methods like real-time rails or APIs.
• Global competitiveness: A fiduciary account aligns MSB with international norms, aiding cross-border services.

An MSB with RPAA-compliant accounts mirrors an Authorized Electronic Money Institution (EMI) in the UK and EEA. Under the UK Payment Services Regulations 2017 (PSR) and the EU Electronic Money Directive 2009/110/EC, EMIs must safeguard client funds in segregated or trust accounts, much like RPAA mandates. This enables EMIs to issue e-money and manage wallets. While RPAA doesn’t grant MSB full EMI status (e.g., issuing e-money requires additional licensing), a segregated trust account allows MSB to offer wallet-like services, positioning them as a Canadian analog to EMIs with similar operational capabilities.

Selecting a provider for segregated accounts for MSB, trust accounts, or fiduciary accounts requires careful evaluation. Consider these factors:

1. Regulatory expertise: Must understand FINTRAC (FINTRAC Guidelines) and RPAA requirements (Bank of Canada RPAA Framework).
2. Cost efficiency: Low fees for safeguarding accounts preserve capital.
3. Speed of onboarding: Rapid verification for end-user funds accounts meets RPAA deadlines.
4. Account flexibility: Options like segregated trust accounts or fiduciary accounts suit your MSB’s needs.
5. Banking relationships: Ties to OSFI-regulated banks ensure RPAA compliance.
6. Scalability: Expandable trust accounts for RPAA compliance as your business grows.

Follow this checklist to choose a provider and comply:

• Confirm FINTRAC registration (FINTRAC MSB Portal).
• Verify PSP status under RPAA (RPAA Eligibility).
• Assess fund storage needs (e.g., wallets require segregated accounts for end-user funds).
• Request provider’s compliance docs for safeguarding accounts.
• Compare fees for trust accounts or fiduciary accounts.
• Ensure KYC aligns with FINTRAC and RPAA timelines.
• Confirm account is at an OSFI-regulated institution.
• Test liquidity in segregated trust accounts.
• Secure RPAA compliance confirmation.

Navigating FINTRAC and RPAA is complex, especially when searching “segregated accounts for MSB Canada,” “trust accounts for FINTRAC compliance,” or “RPAA fiduciary accounts.” We offer:

• Low-cost solutions: Open safeguarding accounts or end-user funds accounts affordably.
• Fast verification: Activate segregated trust accounts in days.
• Dual compliance: Meet FINTRAC (FINTRAC MSB Requirements) and RPAA standards (RPAA Safeguarding Rules).
• Tailored options: From fiduciary accounts for crypto to trust accounts for remittances.

Contact WiseAlt to secure RPAA-compliant accounts that elevate your MSB to an EMI-like entity, ready to thrive in Canada’s payments ecosystem.