A money services business (MSB) is a legal term used by
financial regulators
Financial regulation is a form of regulation or supervision, which subjects financial institutions to certain requirements, restrictions and guidelines, aiming to maintain the stability and integrity of the financial system. This may be handled ...
to describe businesses that transmit or convert
money
Money is any item or verifiable record that is generally accepted as payment for goods and services and repayment of debts, such as taxes, in a particular country or socio-economic context. The primary functions which distinguish money ar ...
. The definition was created to encompass more than just
bank
A bank is a financial institution that accepts Deposit account, deposits from the public and creates a demand deposit while simultaneously making loans. Lending activities can be directly performed by the bank or indirectly through capital m ...
s which normally provide these services to include
non-bank financial institution
A non-banking financial institution (NBFI) or non-bank financial company (NBFC) is a financial institution that does not have a full banking license or is not supervised by a national or international banking regulatory agency. NBFC facilitate b ...
s.
An MSB has specific meanings in different
jurisdictions
Jurisdiction (from Latin 'law' + 'declaration') is the legal term for the legal authority granted to a legal entity to enact justice. In federations like the United States, areas of jurisdiction apply to local, state, and federal levels.
Ju ...
, but generally includes any business that
transmits money or representatives of money, provides
foreign currency exchange
A bureau de change (plural bureaux de change, both ) (British English) or currency exchange (American English) is a business where people can exchange one currency for another.
Nomenclature
Although originally French, the term "bureau de chan ...
such as
Bureaux de change
A bureau de change (plural bureaux de change, both ) (British English) or currency exchange (American English) is a business where people can exchange one currency for another.
Nomenclature
Although originally French, the term "bureau de chan ...
, or cashes
cheques or other money related instruments. It is often used in the context of
Anti Money Laundering (AML) legislation and rules. Money services businesses are governed by their local regulators and have to adhere with record-keeping requirements to conduct customer due diligence if customers request for an amount of foreign currency that exceeds a certain threshold set to detect money laundering.
An MSB often provides an essential financial service to underdeveloped regions with limited or no banking services and may be a small organisation with outlets like grocery stores, drugstores, pharmacies or convenience stores. It may include regional networks of post offices, banks or agents.
See also
*
Alternative financial services
An alternative financial service (AFS) is a financial service provided outside traditional banking institutions, on which many low-income individuals depend. In developing countries, these services often take the form of microfinance. In develo ...
*
Major MSB's
*
Hawala
*
Suspicious activity report
In financial regulation, a Suspicious Activity Report (SAR) or Suspicious Transaction Report (STR) is a report made by a financial institution about suspicious or potentially suspicious activity. The criteria to decide when a report must be ma ...
References
Financial services organizations
Money
{{money-stub