EMI&PSP in Great Britian.
ELECTRONIC MONEY and PAYMENT PROVIDERS IN GREAT BRATAIN
According to UK law, electronic money have a monetary value represented by the obligations of the issuer which is stored electronically and is accepted for payments by third parties. Electronic money considered as the electronic equivalent of coins and banknotes, intended to make payments for small amounts.
In the UK, the payment system, that is allowed to issue electronic money, as well as in Europe, can be created only in the form of EMI (Electronic Money Institution).
Depending on the turnover, there are 2 types of e-money companies in the UK:
- EMI, classic electronic money institution, in this case fee in the FCA will be £ 5000;
- Small EMI (if the monthly turnover does not exceed € 3 000 000, in case when the company activity was not conducted, estimatesaccording to forecasts), in this case the fee will be £ 1 FCA 000. Also note that a small electronic money institution ( EMI) has the right to provide their services only within UK. Upon reaching the limit of € 3 000 000 the applicant must apply withsmall EMI for full license.
Regulation of electronic money issuer in the UK
As with the financial market in Europe, EMI activity in the UK is regulated by the EU Directive 2009/110 / EC on electronic money (hereinafter – the EU Directive).
In addition, at the state level The Financial Conduct Authorityof Great Britain (the FCA) issued the Regulation on electronic money (hereinafter – Regulation). This Regulation was approved on the basis of the EU Directive, but it contains more details about the establishment of EMI exactly within the United Kingdom.
Thus, a central regulator of issuing electronic money institutions licenses in the UK, is the Financial Conduct Authority of Great Britain (hereinafter – FCA). FCA regulates the use of electronic money in accordance with the EU Directive on electronic money. Issuers of electronic money also have obligations in the accordance with the Regulations on money laundering. Upon detection of suspicious activity the company is legally obliged to inform the authorities.
Financial Supervisory Agency requires the evidence from issuers of electronic money that they are able to properly control the risks they face in their work. Measures that can be taken by issuers of electronic money to fulfill their legal obligations, discussed in the Manual of the Joint Steering Group for the control of money laundering.
Simultaneously with the application for a license the Regulator will need to submit a detailed business plan; detailed description of the customer identification procedures, prevention of money laundering illegally; a detailed description of the operations that are planned to be provided for customers; full information about the founders/ shareholders, as well as the top management of the company.
The total period of consideration of the application for a license is up to 3 months. However, if the FCA considers it necessary to request additional information on the applicant, the period of consideration of the application may be extended up to 12 months.
REQUIREMENTS for issuers of electronic money in UK
Shareholders. Office. Authorized capital
The submission of an application for a license for the electronic money (EMI) in the UK can only be made by resident companies. This means that the applicant company can only be registered in England.
However, the founders / shareholders of these companies can be both residents and non-residents of the United Kingdom, individuals or legal entities.
UK law, unlike in many other jurisdictions, contains strict requirements to the top management of the company’s electronic money (EMI), among which we can highlight necessity of having sufficient education and knowledge for management purposes of the issuer of electronic money.
This implies the following:
– Senior management must have experience in launching of such companies. This is very important for FCA, people do not have any experience in this area, usually do not get permission.
– Management of the company of electronic money should be controlled from the UK. FCA identifies the following key points:
- The company must have more of the UK resident directors (or equal amount) than foreign directors (their nationality does not matter).
- FCA assumes that decisions of resident Director is the dominant force, he can say “no” to the policy, strategy and solutions, which usually come from abroad, if they are contrary to the law or regulations the UK.
- Meetings of the Board of Directors should be held in the UK.
- Operational everyday decisions should be made in the UK and the office itself should be based on the territory of that State.
- The company may have a non-resident director in the Board of Directors of the British company, if everything else is based in the UK.
- General Director must be resident and domiciled in the UK and, usually in practice, compliance manager, too.
- Employee on combating money laundering, which may also be a CEO (if he has the appropriate qualifications) must be the UKresident.
- If someone is moving to the UK in order to be the General Director, he must be familiar with the rules of control, depending on the business model, and therefore it may be necessary to hire a local manager who is competent to monitor their compliance.
Office of electronic money issuer in UK
There is a mandatory requirement for the presence of a physical office in the UKfor the applicant for the license of electronic money (EMI).
Authorized capital of EMI in UK
The authorized capital for an electronic money institution (EMI) is approved by the EU Directive and is 350 000 EUR. This size of the authorized capital must be maintained throughout the period of the agency’s activities.
The territory of the license of electronic money validity
The company, which received a license to issue electronic money, has the right to provide its services exclusively on the territory of the United Kingdom. However, as in the case with electronic money in Europe, it can pass on a simplified procedure for certification in any EU country, which greatly facilitates the procedure for the conquest of new markets.
For the issuer of electronic money it is obligatory the accounting and tax reporting. As well as the necessity of auditing.
Thus, summarizing the above conditions, we can confidently say that the UK is the most strictly regulated jurisdiction over the issuers of electronic money.
- The authorized capital of the company 350 000 EUR
- A fee of FCA 5000 GPB
- Resident Director from GPB 70 000 per year
- The actual office from GPB 80 000 per year
- Opening an account 2.000 GPB
- Legal services for EMI license obtaining from 30 000 GPB
Opening of bank accounts
For the company, obtained a license of electronic money in the UK, it will be possible to open a bank account in any jurisdiction. And also it is possible for EMI to conduct a smooth cooperation with any financial institutions.
In 2016, Great Britain took the 13th place in the ranking, that measures the reputation around the world, with an index of 71.08. This rating is based on a number of factors, including the quality of exports,contribution to world culture,the standard of living, the general tolerance, security, etc.
However, after June 27, when the country passed a referendum to withdraw the UK from the EU, the country’s credit rating dropped sharply, which means that the cash flows in the country can be even more reduced. In addition, the same day on the London Stock Exchange was recorded the fact of stopping the trade in shares of the two largest banks (Barclyas and RBS), continued to drop in sterling against other currencies.
To sum up we can say that after the referendum, the UK has become less predictable, stable and effective in forming its policies. Despite this, the United Kingdom, after all, has its significant advantages and can fairly be considered one of the best countries for build a business.
If you need any help in obtaining a license for electronic money in UK, please feel free to contact our specialists via phone numbers, listed on a web-page, or by submitting a form, located on the left side of the page or by the e-mail firstname.lastname@example.org
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