Small Electronic Money Institution Registration
We can help you obtain a small electronic money institution (EMI) license in the UK, enabling you to offer services including issuing electronic money, payment accounts, international money transfer, payment acquiring and processing, account information services, and payment initiation services.
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Why leading firms choose us as their partner.
"We engaged Buckingham Capital Consulting for our Small Electronic Money Institution (EMI) registration, and they have shown great expertise and support throughout the process.
They provided clear guidance on the application process, ensuring we met all criteria and documentation requirements. Their team worked closely with us to complete the application forms accurately and comply with regulatory standards. They also assisted in submitting the application and supported us during the review process.
Buckingham Capital Consulting's attention to detail and knowledge of the regulatory landscape were invaluable in ensuring a smooth and successful registration. We are highly satisfied with the service and expertise provided by Buckingham Capital Consulting."
Our services for small electronic money institutions
FCA registration
We can help advise on the requirements and prepare your application, including all the required policies, for a successful application in the quickest time possible. We also help manage communication with the FCA.
EU licence applications
We help clients in most European countries where the Small Electronic Money institution registration is applicable.
End-to-end set-up
From company incorporation to hiring and arranging banking facilities, we can help with everything required to set up your Small Electronic Money Institution.
Our People
Our team of regulatory and compliance experts brings together diverse backgrounds in banking, consulting, legal, financial, and regulatory sectors. This collective experience provides us with a comprehensive understanding of the unique challenges our clients face. When you choose to work with us, you’ll benefit from the personalised attention of seasoned professionals, often at the director level, ensuring you have direct access to senior experts. Our team combines robust regulatory knowledge with commercial insight, delving deep into your business to tailor unique solutions specifically suited to your needs. This approach ensures we address your challenges effectively and support your success.
Small electronic money institution guide
Introduction
At Buckingham Capital Consulting, we specialise in helping small businesses navigate the process of obtaining Small Electronic Money Institution (EMI) registration with the FCA. We understand that navigating the regulatory landscape can be daunting, especially for smaller firms. Our aim is to simplify the process and make it accessible, allowing you to focus on growing your business while we handle the complexities of regulatory compliance.
What is a Small EMI?
A Small EMI is a type of electronic money institution that operates on a smaller scale, typically with lower transaction volumes and a limited range of services compared to larger EMIs. This category is ideal for startups and small businesses looking to offer electronic money services without the extensive requirements of a full EMI licence.
Key Regulations for Small EMIs
The following laws and regulations apply to Small EMIs in the UK:
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The Electronic Money Regulations 2011
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The Financial Services and Markets Act 2000
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The Payment Services Regulations 2017
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The Money Laundering, Terrorist Financing and Transfer of Funds (Information on the Payer) Regulations 2017
FCA Threshold Conditions for Small EMIs
The FCA’s Threshold Conditions are the minimum standards that firms must meet to be authorised. These include:
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Location of Offices: Your head office and registered office must be located in the UK.
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Effective Supervision: Your business must be capable of being effectively supervised by the FCA.
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Appropriate Resources: Your firm must have adequate financial and non-financial resources.
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Suitability: Your firm’s management must be competent, financially sound, and reputable.
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Business Model: Your business model must be viable and sustainable.
Safeguarding Client Funds
Safeguarding client funds is a critical requirement for Small EMIs. You must implement measures to protect customer money, such as holding it in a segregated account separate from your own funds or using an insurance policy. This ensures that customer funds are safe even if your business encounters financial difficulties.
Steps to Obtain Small EMI Registration
Step 1: Initial Consultation and Assessment
We begin with a detailed consultation to understand your business model and assess your specific needs. This helps us identify the key areas that require attention to ensure a successful application.
Step 2: Preparing the Application
Our experts will assist you in preparing all necessary documentation, including:
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Business Plan: This document should outline your business objectives, target market, and financial forecasts. It should clearly show how your business intends to operate and grow.
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Programme of Operations: A detailed description of your business activities and how you plan to conduct them. This includes the types of electronic money services you will offer.
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Organisational Structure: An overview of your company's structure, including key personnel and their roles.
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Initial Capital Evidence: Proof that you have the necessary initial capital to start your business. For Small EMIs, the initial capital requirement is generally lower than for full EMIs.
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Safeguarding Measures: Detailed information on how you will safeguard customers' funds. This could include using segregated accounts or insurance policies.
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Compliance Policies: Comprehensive policies to meet AML/CTF and other regulatory requirements. This includes customer due diligence, ongoing monitoring, and reporting suspicious activities.
Step 3: Submission and Ongoing Support
We submit your application to the FCA and manage all communication to address any queries promptly. After registration, we provide ongoing support to help you maintain compliance and adapt to regulatory changes.
What is Consumer Duty and How Does It Apply to Small EMIs?
Consumer Duty requires firms to act in the best interests of their customers. For Small EMIs, this means:
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Transparency: Providing clear and concise information about fees, terms, and services.
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Fair Treatment: Ensuring that the products and services offered are suitable for the customers' needs and that customers are treated fairly throughout their relationship with the firm.
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Complaint Handling: Efficiently addressing customer complaints and feedback, ensuring that issues are resolved promptly and fairly.
Documents Required for Small EMI Registration
To apply for Small EMI registration, you will need to prepare and submit the following information:
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Business Plan: Including financial forecasts for a period covering three years.
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Programme of Operations: Detailed description of your business activities.
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Organisational Structure: Description of your organisational structure.
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Initial Capital Evidence: Proof of your initial capital.
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Safeguarding Measures: Details on how you will safeguard users' funds.
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Compliance & Governance Arrangements: Internal controls and compliance procedures.
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Security Incident Procedures: Methods for monitoring, handling, and following up on security incidents and complaints.
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Data Protection Processes: Methods for managing and protecting sensitive payment data.
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Business Continuity Measures: Plans for ensuring business continuity.
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Data Collection Methodology: Methods for collecting performance, transaction, and fraud-related data.
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Security Policy: Your business's security policies.
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Financial Crime Policy: Internal mechanisms to comply with AML/CTF obligations.
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Qualifying Holders Information: Details of shareholders holding or controlling 10% or more of the applicant firm.
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Outsourcing Arrangements: Details of any outsourcing arrangements.
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Management Team Information: Details of individuals responsible for managing your firm.
Registering Management Team Members or Directors
You will need to submit individual forms for each person responsible for managing your Small EMI. This includes the money laundering reporting officer and other key function holders.
Registering People with Qualifying Holdings
Submit details of any person or firm holding or controlling 10% or more of the company's capital or voting rights. Inform the FCA of any changes to the qualifying holdings.
Registering Agents
To engage an agent for distributing e-money or providing payment services, it is mandatory to register them. As the principal firm, you must ensure your agent complies with relevant regulations. Establish suitable systems and controls to effectively supervise their activities and take accountability for their actions.
Time Frame to Obtain the Small EMI Registration
The FCA is required to assess and decide on a Small EMI registration application within three months of receiving a complete application. We help ensure your application is complete and meets all regulatory conditions to avoid delays.
Services Offered by a Small EMI
Small electronic money institutions can issue electronic money like prepaid cards and e-wallets, and offer payment services such as:
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Issuing electronic money (e.g., prepaid cards, electronic wallets).
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Services enabling cash to be placed on a payment account.
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Services enabling cash withdrawals from a payment account.
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Execution of payment transactions, including transfers of funds, direct debits, payment card transactions, and credit transfers.
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Payment instruments or acquiring payment transactions.
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Money remittance.
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Payment initiation services.
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Account information services.
Initial and Ongoing Capital Requirements for the Small EMI Licence
The initial capital required for a Small EMI is typically less than €350,000, making it more accessible for smaller firms. The ongoing capital requirement is calculated at 2% of the outstanding electronic money a firm has issued.
Key Requirements for the Small EMI Licence
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Minimum Capital Requirement: Typically lower than €350,000, depending on the scope of your operations.
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Safeguarding Client Funds: Using a segregated client bank account or insurance policy to protect customer funds.
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Management Body Requirements: The management team must have good reputations and relevant qualifications.
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Compliance with Local/National Requirements: Meeting the Threshold Conditions set by the FCA for the UK Small EMI authorisation.
Our 3-Step Guide to Helping Small Firms Obtain EMI Registration
Step 1: Initial Consultation and Assessment
We begin with a detailed consultation to understand your business model, assess regulatory requirements, and identify key areas needing attention for a strong application.
Step 2: Preparation and Documentation
Our experts assist in preparing comprehensive documentation, including business plans, compliance policies, and operational procedures, ensuring all regulatory standards are met and clearly presented.
Step 3: Submission and Ongoing Support
We submit your application to the FCA, maintain close communication to address any queries, and provide ongoing support to ensure continuous compliance and operational readiness.