This blog article looks at the Electronic Money Institution / E-money EMI license and discusses 5 tips to obtain the license without delays.
1. Business plan
You must ensure that the Electronic Money you wish to provide under your E-money / Electronic Money Institution license fits into the definition of e-money as per the regulatory guidance.
2. Knowledge and experience of your team
As part of your Electronic Money Institution / E-money license application, your key people, such as your CEO, managing director, compliance officer and MLRO, will be individually assessed. You should ensure that such individuals are suitably skilled, knowledgeable and experienced to carry out their roles, as otherwise, the regulator will question their suitability.
3. Initial capital
For both the Payment Institution and the Electronic Money Institution / E-money licenses, you will be required to meet initial capital requirements. For the EMI / Electronic Money Institution or E-money license, the initial capital requirement is EUR 350,000. For the Payment Institution license, the initial capital ranges from EUR 20,000 to 125,000 depending on the payment service you wish to provide.
4. Protect your customer's funds
Under both the Payment Institution and the EMI Electronic Money Institution / E-money licenses, you are required to protect your user's funds. You can do this by either placing the client funds into a separate ring-fenced client account or by obtaining an insurance policy. Insurance policy products are very rare and so you will most likely have to ring-fence the client funds into a segregated client account.
5. Prepare strong policy and procedural documents
You should ensure that in your EMI E-money Electronic Money Institution / E-money license application you demonstrate that you have well-defined and thought-through policy and procedural documents. The business plan, for example, must provide a breakdown of your business, including your marketing plan and your financial forecasts for 3 years. Your compliance documents should demonstrate that you have identified all risks related to your business, particularly those concerning money laundering and terrorism financing.
6. Ensure you have a local operational presence in the country of the license
The financial regulator of the country you are applying in will expect that you have in place, local presence. For countries such as Ireland and the UK, your CEO and money laundering reporting officer (MLRO) must be based in the country. Other countries, such as Lithuania, offer some level of flexibility, in the sense that your CEO and MLRO do not need to be based physically in Lithuania. Additionally, you will also be required to have a physical office in place. A serviced office is sufficient for these purposes.
7. Demonstrate that you understand payments security
Security along with compliance are probably the two most important issues the regulator will assess your application against. The key here is to show the regulator, particularly through your security policy, that you have adequate systems and controls in place to protect your customers and their money.
Buckingham Capital Consulting is an international consulting firm, specialising in payment services, electronic money, banking, and investment services. We are able to advise you on the best course of action and strategy based upon your business plan and financial product or service. We can you with licensing, compliance, operational setup and related services, including, obtaining banking facilities. For more information, visit our website on www.buckinghamcapitalconsulting.com