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Compliance Manual

A compliance manual is a document that outlines the policies, procedures, and regulations that a money services business (MSB) is required to follow in order to comply with laws and regulations related to the operation of that business. The manual is typically designed to help ensure that the business is operating in compliance with laws and regulations related to anti-money laundering (AML), countering the financing of terrorism (CFT), and other financial crimes.

The compliance manual is needed because the laws and regulations related to money services businesses can be complex and change over time, so it is important to have a clear and up-to-date guide to compliance for all employees and management to follow.

A compliance manual is usually created by an organization’s compliance department, or a consultant that specialized in MSB compliance. It is authored initially by compliance officer and/or consultant but it is important that business owner or executive management review and approve it. The compliance department is responsible for updating it to reflect any changes in laws, regulations or any internal compliance issues.

A table of contents of a compliance manual might include sections on AML and CFT policies and procedures, customer identification and verification procedures, recordkeeping and reporting requirements, suspicious activity monitoring and reporting, employee training, and risk management.

The compliance manual is used by all employees and management of the MSB as a guide for compliance with relevant laws and regulations. The compliance department is responsible for ensuring that the information in the manual is correct, and it is usually reviewed and updated on a regular basis.

The compliance manual is related to the business of the MSB in that it outlines the legal and regulatory requirements that the business must comply with in order to operate legally and avoid penalties. It specifically relates to the products and services sold by the MSB in that it outlines the specific policies and procedures that must be followed in relation to those products and services in order to comply with laws and regulations.

The compliance manual should be tailored to the specific products and services offered by the MSB, as well as to the specific risks associated with those products and services. For example, if an MSB offers check cashing services, the compliance manual would need to include policies and procedures specific to check cashing, such as verifying the identity of the person cashing the check, and monitoring for and reporting suspicious check-cashing activity.

Additionally, the compliance manual should be reviewed regularly for relevance and accuracy, and updated as necessary to reflect any changes in laws and regulations, or in the MSB’s products and services. The compliance department is responsible for conducting regular internal audits to verify that the MSB is following the policies and procedures outlined in the compliance manual.

Overall, compliance manual is an important tool for any MSB to ensure compliance with laws and regulations related to the operation of its business. By providing a clear and up-to-date guide to compliance, it helps the MSB to avoid penalties, maintain its reputation, and protect against financial crimes.

It’s also important to note that compliance manual is not only a document for internal use, but also need to be provided to regulatory body upon request, as the regulatory body will be assessing the manual as part of the MSB’s regulatory compliance.

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This page was last updated on January 13, 2023.