Select a legislative/policy area

ID 1012. Scope and definitions
Issuing of e-money services by a payment institution Back

Relevant provisions
Article 6(1)(a) of Directive 2009/110/EC

Question
Dear Sir or Madam,


I have a question regarding issuing of e-money by a payment institution which has already been authorised in accordance with Directive 2007/64/EC.

If I understand the Directive 2009/110/EC correctly, electronic money institutions are, according to Article 6, entitled to also provide payments services defined by the Directive 2007/64/EC, of course under the condition that they fulfil the requirements for the provision of those services as defined by Directive 2007/64/EC.

Transposition of Directive 2009/110/EC to Slovenian law has been done by a revision of the Payment Services and Systems Act, the act which was originally passed to transpose Directive 2007/64/EC. The revised act includes a provision which explicitly prohibits payment institutions to issue electronic money (“Payment institutions shall be prohibited from conducting business of taking deposits or issuing electronic money within the meaning of this Act”). However, it also includes a provision which transposes Article 6 of Directive 2009/110/EC thus enabling electronic money institutions to provide payment services within the meaning of Directive 2007/64/EC.

In light of the described contradictory provisions of the national Act (which are not present in the directives), my question is whether it is correct to assume that an authorised payment institution should nevertheless be allowed to apply for authorisation as an electronic money institution? And whether that institution should, if fulfilling the requirements of both directives, be able to provide both payment services and issue electronic money?

Thank you in advance for your answer.



Answer

In the light of the principle 'same activity, same risks, same rules', the new legal framework for carrying out payment services within the EU provides for a single license which will have to be chosen keeping in mind the scope of the activities of the provider.

For carrying out only the payment services listed in the annex of the Payment Services Directive 2007/64/EC (the PSD), the license of 'payment institution' would be required. In cases where the legislation of a Member State has provided for this option (see http://ec.europa.eu/internal_market/payments/docs/framework/transposition/options_en.pdf), a waiver under Article 26 of the PSD might be granted. At the same time, as stated in recital 9 of the PSD "payment institutions should not be allowed to issue electronic money".

Once the provisions of the new E-Money Directive 2009/110/EC (the EMD) have been implemented in the domestic law of Member States, these institutions will be able, under a single license, not only to issue e-money but also to carry out some or all of the payment services listed in the annex of the PSD and carry out, if they wish so, any other business activity. But the reciprocal is not valid, therefore payment institutions that want to provide services under the EMD must apply for an authorization. 



Date
Submitted on 17/02/2011