The development of innovative paying instruments has led to creation of a new medium called E-money. Funds are presented in digital form and are stored on a chip card or computer. Another “player” has appeared on the financial market – the issuer of electronic funds.
Those firms that received the document have the same rights as other payment organizations. They can conduct transactions both online and offline. The institution allows its clients to open sub-accounts, namely, electronic wallets, within their bank account. Depending on the country where the company will obtain the license, the rules differ. It is obligatory to have an authorized capital of 350 thousand euros. During the consideration of the application, the money must remain in the account of the company. A bank account must be opened in the same jurisdiction where you plan to obtain a license.
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Why do entrepreneurs must get an E-money license?
Businesses looking to issue E-money on a professional basis in the UK need a permission issued by the regulating authority in order to run their business as an e-money issuer. This is a new tool that allows solving problems in the interests of banking establishments and their clients, diversifying risks, and reducing operating costs for both financial services clients and traditional banks.
In fact, the organization resembles a bank that does not issue loans. If you wish, you can open a sub-account inside another bank, by forming an E-wallet. There are also restrictions, but their degree, as a rule, depends on the identification of the person and the jurisdiction itself. The legislation governing such activities changes frequently, so for each project you need to conduct its own research.
Strengths and key features of owning EMI license in UK
Electronic Money Institution is practically a bank. At the same time, the rule “Know your client” applies to such structures in a distorted version in the form of limits on operations. Licenses for financial institutions carrying out transactions using ED have a simplified version – a small EMI license. However, it is not yet possible to obtain it in every EU country.
The restrictions imposed on transactions on client sub-accounts, as a rule, depend on the degree of client identification and differ depending on the jurisdiction. Currently, the provisions of the legislation regulating this issue are dynamically changing all over the world, and therefore it is recommended to conduct a separate clarifying study for each new project.
The EMI license allows you to link existing payment bank cards to client sub-accounts. It is also possible to issue cards from major vendors (VISA, MC). In addition, on the basis of EMI, it is possible to create your own card payment system.
Requirements that are put forward to this institution, registered in the territory of the Great Kingdom
First of all, managers must have the experience and education that are needed for the purposes of EMI licensing. That is, entrepreneurs must run operations in economics and finance, and have the necessary skills. The FCA has specified requirements for applicants in following requirements. Senior management must have the necessary experience in launching such organizations (this is the Board of Directors, founders, CEO and others who manage the legal entity). The organization can only be managed in England.
A tool such as its own electronic quasi-currency provides many opportunities for fraudulent transactions and money laundering. The owners of the company applying for a license are subject to a thorough check, which lasts from 3 to 6 months.
In addition to much other documentation, the final list depends on specific jurisdiction; general mandatory requirement is confirmation of the availability of funds to launch the project declared in the business plan and confirmation of the purity of their origin. To do this, you need to provide extracts from personal or corporate accounts of the company belonging to the future owner, as well as confirmation of the payment of taxes on the corresponding amounts.
Everywhere a considerable sum of money is required for development of the project. Moreover, money must be “clean”. You need to provide a deed of gift, an extract from a personal account, or another document indicating the legal origin of the amount. You will also have to confirm that you paid tax for it. Among other things, there are several basic conditions.
- An entrepreneur must have the status of a legal entity.
- The entrepreneur intends to offer services only in the UK.
- Your firm can demonstrate strong and resilient governance arrangements.
- The entrepreneur has a detailed and well-written business plan.
- The company has implemented appropriate reasonable measures to protect customers’ funds fully.
- You can demonstrate good insurance coverage.
- The main office of the company must be located in the territory of the jurisdiction.
- The director has no criminal record, in particular, for illegal circulation of funds.
- Compliance of the shareholders with their professional competence.
The average time for application consideration takes about a week. In addition, it should be noted that the requirements of the regulatory body often change, and you need to comply with this.