top of page

FAQs about the FCA's Small Electronic Money Institution license

What is an FCA small electronic money institution?

A small electronic money institution (EMI) is a type of authorised entity that can issue electronic money and provide related payment services within certain thresholds.


What services can an FCA small electronic money institution offer?

A small electronic money institution can offer services such as issuing electronic money, providing payment services, and enabling payment transactions using electronic money.


What are the key requirements to become an FCA small electronic money institution?

To become a small electronic money institution, you must meet certain requirements, including having appropriate systems and controls, adequate capital, and safeguarding measures for customer funds.


Can a small electronic money institution passport its services across the European Economic Area (EEA)?

No.


Is there a limit on the annual turnover of a small electronic money institution?

No.


Can a small electronic money institution provide services to non-EEA customers?

No.


What are the reporting obligations for a small electronic money institution?

A small electronic money institution has reporting obligations to the FCA, including submitting financial reports, annual returns, and other relevant information.


Is there a requirement for ongoing capital adequacy for an small electronic money institution?

Yes, a small electronic money institution must maintain appropriate levels of capital and liquidity to ensure ongoing solvency and operational stability. The ongoing capital requirement is 2% of the issued e-money.


Can an FCA small electronic money institution hold customer funds?

Yes, a small electronic money institution can hold customer funds, but strict safeguarding requirements must be met to protect customer funds.


Can an FCA small electronic money institution offer services to businesses and individuals?

Yes, a small electronic money institution can offer services to both businesses and individuals, subject to compliance with relevant regulations.


Are there specific AML/CFT obligations for a small electronic money institution?

Yes, a small electronic money institution must have robust AML/CFT policies and procedures in place to prevent money laundering and terrorist financing activities.


Can a small electronic money institution issue payment cards or prepaid cards?

Yes, a small electronic money institution can issue payment cards or prepaid cards, subject to compliance with card scheme rules and relevant regulations.


Can a small electronic money institution engage in agent or branch relationships?

Yes, a small electronic money institution can establish agent or branch relationships to extend its electronic money issuance and payment services reach, subject to regulatory oversight and agreements.


Can a small electronic money institution offer services in multiple currencies?

Yes, a small electronic money institution can offer services in multiple currencies, subject to compliance with relevant regulations and foreign exchange requirements.


Can a small electronic money institution offer interest or investment services?

A small electronic money institution's primary focus is on electronic money issuance and payment services, and offering interest or investment services will require additional regulatory permissions.


Is there a limit on the amount of electronic money a small electronic money institution can issue?

Yes, there is a limit on the amount of electronic money a small electronic money institution can issue, which is currently set at €5 million.


What changes need to be notified to the FCA for a small electronic money institution?

A small electronic money institution must notify the FCA of significant changes to its business, such as changes in ownership, control, key personnel, or material business activities.


Can a small electronic money institution merge or be acquired by another entity?

Yes, a small electronic money institution can merge with or be acquired by another entity, but regulatory approval and notifications are typically required.


Are there any exemptions or waivers available for specific types of small electronic money institutions?

The FCA provides exemptions or waivers for certain types of FCA small electronic money institutions under specific circumstances. These exemptions should be discussed with the FCA directly.


Can a small electronic money institution engage in crowdfunding activities?

Engaging in crowdfunding activities will require additional permissions and regulatory compliance beyond the scope of an FCA small electronic money institution's authorisation.


Can a small electronic money institution offer services to vulnerable customers?

Yes, a small electronic money institution must have appropriate policies and procedures in place to ensure fair treatment of vulnerable customers and comply with consumer protection regulations.


Can a small electronic money institution outsource certain functions or activities?

Yes, a small electronic money institution can outsource certain functions or activities, but it remains responsible for the outsourced activities and must have proper oversight and control in place.


Are there restrictions on the marketing and promotion of a small electronic money institution's services?

A small electronic money institution must comply with regulations regarding the marketing and promotion of its services, including ensuring accuracy, fairness, and compliance with consumer protection rules.


Can a small electronic money institution offer services through mobile applications or online platforms?

Yes, a small electronic money institution can offer services through mobile applications or online platforms, subject to compliance with relevant regulations and security requirements.


Can a small electronic money institution change its business model after obtaining authorization?

Yes, a small electronic money institution can make changes to its business model, but significant changes may require regulatory notifications and assessments of compliance with applicable regulations.


Can a small electronic money institution offer services to regulated entities?

Yes, a small electronic money institution can provide services to regulated entities, such as banks and other financial institutions, subject to compliance with relevant regulations and agreements.


What happens if a small electronic money institution fails to meet its regulatory obligations?

Failure to meet regulatory obligations can result in enforcement action, fines, suspension, or revocation of authorization, or other regulatory consequences.


How can I find out more about the small electronic money institution registration process?

For detailed information on the FCA's small electronic money institution registration process, it is recommended to visit the official website of the Financial Conduct Authority or seek professional advice from legal and compliance experts familiar with the payment services industry.


Comments


bottom of page