Electronic money institution prudential requirements
Electronic money institution prudential requirements

The following Financial Services practice note provides comprehensive and up to date legal information covering:

  • Electronic money institution prudential requirements
  • Introduction to the prudential requirements for electronic money institutions
  • Initial and ongoing capital
  • Instruments which can be used for capital purposes
  • Unrelated payment services business
  • Methods for calculating ongoing capital requirements
  • Method A
  • Method B
  • Method C
  • Method D
  • More...

BREXIT: The UK is leaving EU on Exit Day (as defined in the European Union (Withdrawal) Act 2018). This has an impact on this Practice Note. For further guidance on the impact of Brexit on payment services regulation, see Practice Note: Impact of Brexit: Payment services and electronic money directives—quick guide.

Introduction to the prudential requirements for electronic money institutions

The recast Electronic Money Directive’s (Directive 2009/110/EC) (2EMD) prudential requirements are implemented in the UK by the Electronic Money Regulations 2011, SI 2011/99 (EMRs). This Practice Note focuses on these prudential requirements through the guise of the EMRs. A number of amendments were made to the EMRs by the Payment Services Regulations 2017, SI 2017/752 (PSRs 2017), which implements the recast Payment Services Directive (Directive (EU) 2015/2366) (PSD2). This Practice Note reflects the amendments made to the EMRs by the PSRs 2017.

For more information about PSD2 and the PSRs 2017, see Practice Note: The regulation of payment services providers—essentials, Payment Services Directive 2 (PSD2)—timeline and Payment services—overview.

Initial and ongoing capital

Regulatory capital is required to be held as a buffer, absorbing both unexpected losses that arise while the business is a going concern as well as the first losses if it is wound up. The aim is to deliver an element of consumer protection. The capital requirements are both initial requirements of authorisation or registration and ongoing

Popular documents