The Importance of Regulation and Who Does What

Sending money to another country has become extremely simple and convenient. All you need is a bank account and access to one of the many transfer services that are available.

Security and TrustBoth the person who is remitting the funds and the recipient should be aware that they need to adhere to the rules and regulations governing such transactions in their respective countries. In the normal course, your bank or the agency that you are using ensures adherence to the applicable laws.

If you are dealing with a reputed and well-established money-transfer service provider, you need not worry too much about regulatory compliance issues as these will be taken care of. But it is good to know about the various statutes in different countries that apply to your money transfer so you can check to see if the company you are using is registered.

Below Covers:

  • Australia
  • Canada
  • Hong Kong
  • UK
  • Europe
  • USA


The Australian Securities and Investment Commission (ASIC) is responsible for overseeing the foreign exchange market and all money transfer providers.

The agency that you use should have an Australian Financial Services License (AFS). This certification is given only if the representatives of the firm are adequately trained to carry out money transfer transactions.
If you use an ASIC registered money transfer provider you can be sure that the relevant Australian legislation regarding fraud and money laundering has been complied with.

Another advantage in dealing with an ASIC licensed agency is that it will have a suitable dispute resolution mechanism in place if you are dissatisfied with your transaction.


The agency that is responsible for monitoring financial transactions in Canada is the Financial Transactions and Reports Analysis Centre (FinTRAC). Its mandate requires it to pay special attention to the detection and prevention of money laundering and terrorist activities.
Money Services Businesses (MSBs), which include money transfer providers and foreign exchange brokers fall under FinTRAC’s purview.

FinTRAC regulated MSBs are required to maintain segregated client accounts. This regulation protects consumers as their money is kept independent of the money transfer providers’ other funds. In the event that the MSB gets into financial difficulties, the customer’s funds are not in danger of being lost.

Hong Kong

The Hong Kong Monetary Authority (HKMA) functions as the central bank and is responsible for ensuring compliance with local and international regulations. Banks that provide money transfer services are monitored by the HKMA.

Other money transfer providers fall under the Anti-Money Laundering and Counter-Terrorist Financing Ordinance (AMLO). They are required to apply for a licence from the Commissioner of Customs & Excise.
The rules governing international money transfer providers are very strict and it is in the interest of persons seeking to remit money abroad to ensure that the agency that they are using is licensed by the Customs & Excise department.


Money transfer agencies in the UK can be either ‘registered’ or ‘authorised’ by the Financial Conduct Authority (FCA). The FCA is an independent body that protects the interests of consumers in the UK.
The FCA ‘registers’ a money transfer agency on the basis of two conditions. The first is that it should be based in the UK and the second, that none of its managers have been convicted of financial crimes.
An “authorised’ agency, on the other hand, offers customers greater protection as the process of authorisation by the FCA is more stringent.
If you are dissatisfied with the services of the agency that you have used, you can approach the Financial Ombudsman Service for redress.


The European Central Bank sets the policies for all member countries. But the central bank of each country is responsible for implementation.
Recently, a number of new rules have been implemented to prevent money laundering. These require that any transfer of €10,000 and above requires stricter customer due diligence. EU countries are also required to set up registers to record the ultimate parties who are receiving the funds.


Money transfer providers are known as Money Services Businesses (MSBs) in the US. They are overseen by the Financial Crimes Enforcement Network (FinCEN), which is part of the US Treasury department.

However regulation of money transfer agencies is done at the state level.

The Consumer Financial Protection Bureau (CFPB) is the federal agency responsible for ensuring that customers utilising money transfer facilities are treated in a fair manner.

The CFPB has framed rules that require money transfer agencies to disclose the fees that they charge. In fact, you will receive an initial disclosure statement that clearly lays down the amount you have requested to be sent, the exchange rate, taxes, and the amount that the recipient will get.
You can use this information to compare the offers of several MSBs. When you actually use the services of the MSB that you select, you will get another statement furnishing complete details of your transaction.
Rationale for money transfer regulations

The greatest advantage of online money transfers is the speed at which they are completed and the convenience they offer. But the service can also be used for fraudulent activities and money laundering.

It is for this reason that the financial regulatory authorities across the globe have implemented a number of measures that seek to curb the illegal use of international money transfer facilities.

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