The Electronic Money Regulations 2011

Registration as a small electronic money institution U.K.

Application for registration as a small electronic money institution or variation of an existing registration U.K.

12.—(1) An application for registration as a small electronic money institution must contain, or be accompanied by, such information as the Authority may reasonably require.

(2) An application for the variation of a registration must—

(a) contain a statement of the proposed variation;

(b) contain a statement of the electronic money issuance and payment services business which the applicant proposes to carry on if the registration is varied; and

(c) contain, or be accompanied by, such other information as the Authority may reasonably require.

(3) An application under paragraph (1) or (2) must be made in such manner as the Authority may direct.

(4) At any time after receiving an application and before determining it, the Authority may require the applicant to provide it with such further information as it reasonably considers necessary to enable it to determine the application.

(5) Different directions may be given, and different requirements imposed, in relation to different applications or categories of application.

Conditions for registration U.K.

13.—(1) The Authority may refuse to register an applicant as a small electronic money institution only if any of the conditions set out in paragraphs (2) to (10) is not met.

(2) The application must comply with the requirements of, and any requirements imposed under, [F1 regulations 12 and 20].

(3) The total business activities of the applicant immediately before the time of registration must not generate average outstanding electronic money that exceeds 5,000,000 euro.

(4) The monthly average over the period of 12 months preceding the application of the total amount of relevant payment transactions must not exceed 3,000,000 euro.

[F2 (4A) The business to which the application relates must not include the provision of account information services or payment initiation services.]

(5) The applicant must immediately before the time of registration hold such amount, if any, of initial capital as is required in accordance with Part 1 of Schedule 2.

(6) The applicant must satisfy the Authority that, taking into account the need to ensure the sound and prudent conduct of the affairs of the institution, it has—

(a) robust governance arrangements for its electronic money and payment services business, including a clear organisational structure with well-defined, transparent and consistent lines of responsibility; and

(b) effective procedures to identify, manage, monitor and report any risks to which it might be exposed,

which are comprehensive and proportionate to the nature, scale and complexity of electronic money to be issued and payment services to be provided by the institution.

(7) The applicant must satisfy the Authority that—

(a) the directors and persons responsible for the management of its electronic money and payment services business are of good repute and possess appropriate knowledge and experience to issue electronic money and provide payment services;

(b) it has a business plan (including for the first three years, a forecast budget calculation) under which appropriate and proportionate systems, resources and procedures will be employed by the institution to operate soundly; and

(c) it has taken adequate measures for the purpose of safeguarding electronic money holders' funds in accordance with regulation 20.

(8) None of the individuals responsible for the management or operation of the business has been convicted of—

(a) an offence under Part 7 of the Proceeds of Crime Act 2002 (money laundering) M1 or under [F3 the Money Laundering, Terrorist Financing and Transfer of Funds (Information on the Payer) Regulations 2017];

(b) an offence under section 15 (fund-raising), 16 (use and possession), 17 (funding arrangements), 18 (money laundering) or 63 (terrorist finance: jurisdiction) of the Terrorism Act 2000M2 ;

(c) an offence under the 2000 Act;

[F4 (ca) an offence under Part 3, 4 or 5 of the Counter-Terrorism (Sanctions) (EU Exit) Regulations 2019;]

(d) an offence under the Terrorist Asset-Freezing etc. Act 2010M3 [F5 , the Al-Qaida and Taliban (Asset-Freezing) Regulations 2010 or [F6 the ISIL (Da’esh) and Al-Qaida (Asset-Freezing) Regulations 2011 (S.I. 2011/2742 as renamed by S.I. 2016/937)]];

[F7 (da) an offence under Part 3, 5, 6 or 7 of the ISIL (Da'esh) and Al-Qaida (United Nations Sanctions) (EU Exit) Regulations 2019 or Part 3, 6 or 7 of the Counter-Terrorism (International Sanctions) (EU Exit) Regulations 2019;]

(e) an offence under these Regulations or the Payment Services Regulations [F8 2017]; or

(f) any other financial crime.

(9) The applicant must be a body corporate whose head office is situated in the United Kingdom.

(10) The applicant must comply with a requirement of [F9 the Money Laundering, Terrorist Financing and Transfer of Funds (Information on the Payer) Regulations 2017] to be included in a register maintained under those Regulations where such a requirement applies to the applicant.

(11) For the purposes of paragraph (4), where the applicant has yet to commence the provision of payment services which are not related to the issuance of electronic money, or has been providing such payment services for less than 12 months, the monthly average may be based on the projected total amount of relevant payment transactions over a 12 month period.

(12) In paragraph (4) “relevant payment transactions” in respect of a small electronic money institution means payment transactions which—

(a) are not related to the issuance of electronic money; and

(b) are executed by the institution, including any of its agents who are in the United Kingdom.

(13) In paragraph (8) “financial crime” includes any offence involving fraud or dishonesty and, for this purpose, “offence” includes any act or omission which would be an offence if it had taken place in the United Kingdom.

Textual Amendments

F1 Words in reg. 13(2) substituted (13.8.2017 for specified purposes, 13.10.2017 for specified purposes, 13.1.2018 in so far as not already in force) by The Payment Services Regulations 2017 (S.I. 2017/752), reg. 1(2)(c)(iii)(3)(f)(i)(6), Sch. 8 para. 5(10)(a) (with reg. 3)

F2 Reg. 13(4A) inserted (13.8.2017 for specified purposes, 13.10.2017 for specified purposes, 13.1.2018 in so far as not already in force) by The Payment Services Regulations 2017 (S.I. 2017/752), reg. 1(2)(c)(iii)(3)(f)(i)(6), Sch. 8 para. 5(10)(b) (with reg. 3)

F3 Words in reg. 13(8)(a) substituted (26.6.2017) by The Money Laundering, Terrorist Financing and Transfer of Funds (Information on the Payer) Regulations 2017 (S.I. 2017/692), reg. 1(2), Sch. 7 para. 28(4)(a) (with regs. 8, 15)

F4 Reg. 13(8)(ca) inserted by S.I. 2019/577, reg. 34C(2) (as inserted (31.12.2020 immediately after IP completion day) by The Sanctions (EU Exit) (Consequential Provisions) (Amendment) Regulations 2020 (S.I. 2020/1289), regs. 1(2), 4(2)); S.I. 2020/1514, reg. 21)

F5 Words in reg. 13(8)(d) substituted (16.11.2011) by The Al-Qaida (Asset-Freezing) Regulations 2011 (S.I. 2011/2742), reg. 1(1), Sch. 2 para. 5 (with reg. 18)

F6 Words in reg. 13(8)(d) substituted (22.9.2016) by The Al-Qaida (Asset-Freezing) (Amendment) Regulations 2016 (S.I. 2016/937), reg. 1, Sch. para. 5

F7 Reg. 13(8)(da) inserted (31.12.2020 immediately after IP completion day) by The Sanctions (EU Exit) (Miscellaneous Amendments) Regulations 2020 (S.I. 2020/591), regs. 1(2), 10(1); S.I. 2020/1514, reg. 5

F8 Word in reg. 13(8)(e) substituted (13.8.2017 for specified purposes, 13.10.2017 for specified purposes, 13.1.2018 in so far as not already in force) by The Payment Services Regulations 2017 (S.I. 2017/752), reg. 1(2)(c)(iii)(3)(f)(i)(6), Sch. 8 para. 5(10)(c) (with reg. 3)

F9 Words in reg. 13(10) substituted (26.6.2017) by The Money Laundering, Terrorist Financing and Transfer of Funds (Information on the Payer) Regulations 2017 (S.I. 2017/692), reg. 1(2), Sch. 7 para. 28(4)(b) (with regs. 8, 15)

Marginal Citations

M1 2002 c.29. Part 7 was amended by S.I. 2007/3398.

M2 2000 c.11.

M3 2010 c.38.

Average outstanding electronic money U.K.

14.—(1) Where—

(a) an applicant provides payment services that are not related to the issuance of electronic money or carries out any of the activities referred to in regulation 32(1)(b) to (d) and (2); and

(b) the amount of outstanding electronic money is unknown in advance,

the applicant may make an assessment for the purposes of regulation 13(3) on the basis of a representative portion assumed to be used for the issuance of electronic money, provided that the representative portion can be reasonably estimated on the basis of historical data and to the satisfaction of the Authority.

(2) Where an applicant has not completed a sufficiently long period of business to compile historical data adequate to make the assessment under paragraph (1), the applicant must make the assessment on the basis of projected outstanding electronic money as evidenced by its business plan, subject to any adjustments to that plan which are, or have been, required by the Authority.

Supplementary provisions U.K.

15.  Regulations 7 to 11 apply to registration as a small electronic money institution as they apply to authorisation as an authorised electronic money institution with the following modifications—

(a) references to authorisation are to be treated as references to registration;

(b) for regulation 8 substitute—

“8.— (1) The Authority may, on the application of a small electronic money institution, vary the person's registration by—

(a) imposing a requirement such as may, under regulation 7, be included in a registration;

(b) cancelling a requirement included in the registration or previously imposed under paragraph (a); or

(c) varying such a requirement,

provided that [F10 the Authority is satisfied that] the conditions set out in paragraph (2) [F11 are being or are likely to be met].

(2) The conditions F12 ... are—

(a) the conditions in regulation 13(6) to (10);

(b) where applicable, compliance with the requirement in regulation 19(2) to maintain own funds;

(c) the condition that the total business activities of the applicant generate average outstanding electronic money that does not exceed 5,000,000 euro; and

(d) the condition that the monthly average over any period of 12 months of the total amount of relevant payment transactions does not exceed 3,000,000 euro.

(3) In paragraph (2)(d) “relevant payment transactions” has the same meaning as in regulation 13.”;

(c) in regulation 10 for paragraph (1)(e) substitute—

“(e) the person no longer complies with, or is unlikely to continue to comply with, any of the conditions mentioned in regulation 8(2)(a), (b), (c) and (d) [F13 , or does not inform the Authority of a major change in circumstances which is relevant to its meeting those conditions, as required by regulation 37];”; and

(d) in regulation 11 for paragraph (1)(a) substitute—

“(a) the person no longer complies with, or is unlikely to continue to comply with, any of the conditions mentioned in regulation 8(2)(a), (b), (c) and (d);”.

Textual Amendments

F10 Words in reg. 15(b) inserted (13.8.2017 for specified purposes, 13.10.2017 for specified purposes, 13.1.2018 in so far as not already in force) by The Payment Services Regulations 2017 (S.I. 2017/752), reg. 1(2)(c)(iii)(3)(f)(i)(6), Sch. 8 para. 5(11)(a)(i)(aa) (with reg. 3)

F11 Words in reg. 15(b) substituted (13.8.2017 for specified purposes, 13.10.2017 for specified purposes, 13.1.2018 in so far as not already in force) by The Payment Services Regulations 2017 (S.I. 2017/752), reg. 1(2)(c)(iii)(3)(f)(i)(6), Sch. 8 para. 5(11)(a)(i)(bb) (with reg. 3)

F12 Words in reg. 15(b) omitted (13.8.2017 for specified purposes, 13.10.2017 for specified purposes, 13.1.2018 in so far as not already in force) by virtue of The Payment Services Regulations 2017 (S.I. 2017/752), reg. 1(2)(c)(iii)(3)(f)(i)(6), Sch. 8 para. 5(11)(a)(ii) (with reg. 3)

F13 Words in reg. 15(c) inserted (13.8.2017 for specified purposes, 13.10.2017 for specified purposes, 13.1.2018 in so far as not already in force) by The Payment Services Regulations 2017 (S.I. 2017/752), reg. 1(2)(c)(iii)(3)(f)(i)(6), Sch. 8 para. 5(11)(b) (with reg. 3)

[F14 Application for authorisation if requirements cease to be met] U.K.

16.  Where a small electronic money institution ceases to comply with a condition [F15 in regulation 13(3), (4), (8) or (9)], the institution concerned must, within 30 days of becoming aware of the change in circumstances, apply to become an authorised electronic money institution under regulation 5 if it intends to continue issuing electronic money in the United Kingdom.

Textual Amendments

F14 Reg. 16 heading substituted (13.8.2017 for specified purposes, 13.10.2017 for specified purposes, 13.1.2018 in so far as not already in force) by The Payment Services Regulations 2017 (S.I. 2017/752), reg. 1(2)(c)(iii)(3)(f)(i)(6), Sch. 8 para. 5(12)(a) (with reg. 3)

F15 Words in reg. 16 substituted (13.8.2017 for specified purposes, 13.10.2017 for specified purposes, 13.1.2018 in so far as not already in force) by The Payment Services Regulations 2017 (S.I. 2017/752), reg. 1(2)(c)(iii)(3)(f)(i)(6), Sch. 8 para. 5(12)(b) (with reg. 3)