The Electronic Money Regulations 2011

Conditions for authorisation U.K.

6.—(1) The Authority may refuse to grant an application for authorisation only if any of the conditions set out in paragraphs (2) to (8) is not met.

(2) The application must comply with the requirements of, and any requirements imposed under, [F1 regulations 5 and 20].

(3) The applicant must immediately before the time of authorisation hold the amount of initial capital required in accordance with Part 1 of Schedule 2.

(4) The applicant must be either—

(a) a body corporate constituted under the law of a part of the United Kingdom having—

(i) its head office; and

(ii) if it has a registered office, that office,

in the United Kingdom; or

(b) a body corporate which has a branch that is located in the United Kingdom and whose head office is situated in a territory that is outside the [F2 United Kingdom].

[F3 (4A) The applicant carries on, or will carry on, at least part of its electronic money and payment service business in the United Kingdom.]

(5) 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 issuance and payment service business, including a clear organisational structure with well-defined, transparent and consistent lines of responsibility;

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

(c) adequate internal control mechanisms, including sound administrative, risk management and accounting procedures,

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.

(6) The applicant must satisfy the Authority that—

(a) having regard to the need to ensure the sound and prudent conduct of the affairs of an authorised electronic money institution, any persons having a qualifying holding in the institution are fit and proper persons;

(b) 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;

(c) 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;

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

[F4 (e) in the case of an applicant which proposes to carry on payment initiation services, it holds professional indemnity insurance or a comparable guarantee, which covers—

(i) the territories in which the applicant proposes to offer payment initiation services; and

(ii) the applicant's potential liability under regulations 76 and 91 to 95 of the Payment Services Regulations 2017, up to such amount as the Authority may direct; and

(f) in the case of an applicant which proposes to carry on account information services, it holds professional indemnity insurance or a comparable guarantee, which covers—

(i) the territories in which the applicant proposes to offer account information services; and

(ii) the applicant's potential liability to account servicing payment service providers and payment service users resulting from unauthorised or fraudulent access to, or use of, payment account information, up to such amount as the Authority may direct.]

(7) The applicant must comply with a requirement of [F5 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.

(8) If the applicant has close links with another person (“CL”) the applicant must satisfy the Authority—

(a) that those links are not likely to prevent the Authority's effective supervision of the applicant; and

(b) if it appears to the Authority that CL is subject to the laws, regulations or administrative provisions of a territory which is [F6 outside the United Kingdom] (“the foreign provisions”), that neither the foreign provisions, nor any deficiency in their enforcement, would prevent the Authority's effective supervision of the applicant.

(9) For the purposes of paragraph (8), an applicant has close links with CL if—

(a) CL is a parent undertaking of the applicant;

(b) CL is a subsidiary undertaking of the applicant;

(c) CL is a parent undertaking of a subsidiary undertaking of the applicant;

(d) CL is a subsidiary undertaking of a parent undertaking of the applicant;

(e) CL owns or controls 20% or more of the voting rights or capital of the applicant; or

(f) the applicant owns or controls 20% or more of the voting rights or capital of CL.

Textual Amendments

F1 Words in reg. 6(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(6)(a) (with reg. 3)

F2 Words in reg. 6(4)(b) substituted (31.12.2020) by The Electronic Money, Payment Services and Payment Systems (Amendment and Transitional Provisions) (EU Exit) Regulations 2018 (S.I. 2018/1201), reg. 1(3), Sch. 2 para. 5(2) (with reg. 4, Sch. 3 Pt. 1) (with further transitional provisions in Sch. 3 Pt. 1A as inserted by S.I. 2019/405, regs. 1, 10 and as amended by S.I. 2019/1010, regs. 1(3), 7; S.I. 2019/1212, regs. 1(2), 7 and S.I. 2020/56, regs. 1, 8); 2020 c. 1, Sch. 5 para. 1(1)

F3 Reg. 6(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(6)(b) (with reg. 3)

F4 Reg. 6(6)(e)(f) 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(6)(c) (with reg. 3)

F5 Words in reg. 6(7) 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(3) (with regs. 8, 15)

F6 Words in reg. 6(8)(b) substituted (31.12.2020) by The Electronic Money, Payment Services and Payment Systems (Amendment and Transitional Provisions) (EU Exit) Regulations 2018 (S.I. 2018/1201), reg. 1(3), Sch. 2 para. 5(3) (with reg. 4, Sch. 3 Pt. 1) (with further transitional provisions in Sch. 3 Pt. 1A as inserted by S.I. 2019/405, regs. 1, 10 and as amended by S.I. 2019/1010, regs. 1(3), 7; S.I. 2019/1212, 1(2), 7 and S.I. 2020/56, regs. 1, 8); 2020 c. 1, Sch. 5 para. 1(1)

Modifications etc. (not altering text)

C1 Reg. 6 excluded (20.11.2018) by The Electronic Money, Payment Services and Payment Systems (Amendment and Transitional Provisions) (EU Exit) Regulations 2018 (S.I. 2018/1201), reg. 1(2), Sch. 3 para. 7(1)(2) (with reg. 4)