The Financial Intelligence Centre ("FIC") released the updated draft of Public Compliance Communication ("PCC") 118A to provide clarity on the interpretation of Item 19 in Schedule 1 of the Financial Intelligence Centre Act ("FICA"). Released on 31 March 2025, the draft specifically addresses accountable institutions, including money or value transfer service ("MVTS") providers.
Draft PCC 118A offers guidance on Item 19 of Schedule 1 to FICA. This update follows amendments made to Schedule 1 off FICA as published in Government Gazette 47596, which took effect on 19 December 2022.
The first round of public consultation for Draft PCC 118 occurred from 15 December 2022 to 20 January 2023. The FIC considered and incorporated all relevant feedback received during that period into the updated draft where appropriate. The current draft, PCC 118A, is now available for a second round of consultation. Comments from accountable institutions, supervisory bodies, and the public are invited between Monday, 31 March 2025, and Friday, 25 April 2025 (close of business) via the FIC's online comments submission link only.
Key Highlights from Draft PCC 118A:
- Definition of Money or Value Transfer
Providers:
Draft PCC 118A clarifies that MVTS providers are those involved in financial services that accept cash, electronic funds, other monetary instruments, or other forms of value and then transfer a corresponding amount (less any applicable fees) to a beneficiary. This can be done via cash, electronic funds, other monetary instruments, or through a clearing network. Transactions may involve one or more intermediaries and a final payment to a third party, potentially including newer payment methods. The definition of MVTS is broad, encompassing both formal and informal services, as well as domestic and cross-border money or value transfers. - Application to "Business" of Providing
MVTS:
Only entities that "carry on the business" of providing money or value transfer services fall under Item 19. The term "business" here refers to a commercial activity or institution, not charitable or governmental activities. - Inclusion of Non-Bank and Informal
Providers:
The guidance further extends the definition of money or value transfer providers. For example, non-bank-issued open-loop prepaid card providers, where a payment is made to credit a prepaid or debit card (minus a small fee), and informal money remitters who facilitate the transfer and receipt of funds (settled through trade, cash, or net settlement) are also included in this category.
In the FIC's view, as expressed in Draft PCC118, persons who provide certain payment activities fall within the ambit of item 19 of Schedule 1 to FICA and are designated as domestic MVTS providers, including the provision of faster payments, money remittance and third-party payments.
This update underscores the evolving regulatory landscape for MVTS providers and reinforces the FIC's commitment to ensuring comprehensive compliance with anti-money laundering and combating the financing of terrorism standards.
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