Do Authorized Agents of Money Services Businesses Need a Compliance Officer?
Yes, authorized agents of licensed money services businesses (MSBs) with money transmitter licenses (MTLs) need a compliance officer. However, the level of responsibility and complexity differs significantly from that of a compliance officer for a fully-licensed MSB.
Think of the agent’s compliance officer role as an extension of the principal license holder’s compliance program. Just like Western Union agents (grocery stores, gas stations, etc.), authorized agents are subjected to the principal’s compliance framework. This means:
- Light compliance: Agents receive basic training on key regulations like Know Your Customer (KYC) and Anti-Money Laundering (AML).
- Limited scope: Agents typically handle minimal compliance tasks, like verifying transaction amounts and IDs for specific thresholds set by the principal.
- Principal oversight: The principal MSB bears ultimate responsibility for compliance, providing resources and guidance to agents.
Reasons for light compliance:
- Reduced risk: Agents usually handle smaller transactions and serve a defined customer base, reducing the risk of illegal activity.
- Efficiency: Streamlined compliance processes ensure smooth operations for both the agent and the principal.
- Resource allocation: The principal MSB’s compliance team can focus on higher-risk areas and support the agent network.
Key takeaways:
- Agents require a compliance officer, but not to the full extent of a standalone MTL holder.
- Compliance responsibility rests primarily with the principal MSB.
- Agents fulfill specific compliance tasks within the principal’s framework.
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This page was last updated on December 13, 2023.
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