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EG 19.23 1Electronic Money Regulations 2011

EG 19.23.1

1The FCA has investigation and sanctioning powers in relation to both criminal and civil breaches of the Electronic Money Regulations. The Electronic Money Regulations impose requirements including, amongst other things, various provisions regulating the rights and obligations of electronic money institutions.

EG 19.23.2

1In addition to its powers that apply to authorised electronic money institutions, generally the FCA has the power to prohibit or restrict the carrying out of certain regulated activities by EEA authorised electronic money institutions.

EG 19.23.3

1The FCA's approach to enforcing the Electronic Money Regulations will mirror its general approach to enforcing the Act, as set out in EG 2. It will seek to exercise its enforcement powers in a manner that is transparent, proportionate, responsive to the issue, and consistent with its publicly stated policies. It will also seek to ensure fair treatment when exercising its enforcement powers. Finally, it will aim to change the behaviour of the electronic money issuer or relevant person who is the subject of its action, to deter future non-compliance by others, to eliminate any financial gain or benefit from non-compliance, and where appropriate, to remedy the harm caused by the non-compliance.

EG 19.23.4

1The Electronic Money Regulations, for the most part, mirror the FCA's investigative, sanctioning and regulatory powers under the Act. The FCA has decided to adopt procedures and policies in relation to the use of those powers akin to those it has under the Act. Key features of the FCA's approach are described below.

The conduct of investigations under the Electronic Money Regulations

EG 19.23.5

1The Electronic Money Regulations apply much of Part 11 of the Act. The effect of this is to apply the same procedures under the Act for appointing investigators and requiring information when investigating breaches of the Electronic Money Regulations.

EG 19.23.6

1The FCA will notify the subject of the investigation that it has appointed investigators to carry out an investigation under the Electronic Money Regulations and the reasons for the appointment, unless notification is likely to prejudice the investigation or otherwise result in it being frustrated. The FCA's policy in civil investigations under the Electronic Money Regulations is to use powers to compel information in the same way as it would in the course of an investigation under the Act.

Decision making under the Electronic Money Regulations

EG 19.23.7

1The RDC is the FCA's decision maker for some of the decisions under the Electronic Money Regulations as set out in DEPP 2 Annex 1G. The RDC will make its decisions following the procedure set out in DEPP 3.2 or, where appropriate, DEPP 3.3 and 3.4. DEPP 3.4 applies for urgent notices under regulation 11(6), (9) and (10)(b) (including as applied by regulation 15).

EG 19.23.8

1For decisions made by executive procedures the procedures to be followed will be those described in DEPP 4.

EG 19.23.9

1The Electronic Money Regulations do not require the FCA to have published procedures to commence criminal prosecutions. However, in these situations the FCA expects that it will normally follow its decision-making procedures for the equivalent decisions under the Act.

EG 19.23.10

1The Electronic Money Regulations require the FCA to give third party rights as set out in section 393 of the Act and to give access to material as set out in section 394 of the Act in certain cases.

EG 19.23.11

1Certain FCA decisions (for example the cancellation of an authorisation or the imposition of a financial penalty) may be referred to the Tribunal by an aggrieved party.

Imposition of penalties under the Electronic Money Regulations

EG 19.23.12

1When determining whether to take action to impose a penalty the FCA's policy includes having regard to the relevant factors in DEPP 6.2 and DEPP 6.4. When determining the level of a financial penalty the FCA's policy includes having regard to relevant principles and factors in DEPP 6.5 to 6.5D.

EG 19.23.13

1When determining whether to suspend the authorisation or, as the case may be, the registration of an electronic money institution or limit or otherwise restrict the carrying on of electronic money issuance or payments services business by an electronic money issuer the FCA's policy will have regard to the relevant factors in DEPP 6A.

EG 19.23.14

1As with cases under the Act, the FCA may settle or mediate appropriate cases involving civil breaches of the Electronic Money Regulations to assist it to exercise its functions under the Regulations in the most efficient and economic way. See DEPP 5, DEPP 6.7 and EG 5 for further information on the settlement process and the settlement discount scheme.

Statement of policy in section 169(7) interviews (as implemented by the Electronic Money Regulations)

EG 19.23.15

1The Electronic Money Regulations apply section 169 of the Act which requires the FCA to publish a statement of policy on the conduct of certain interviews in response to requests from overseas regulators. For the purposes of the Electronic Money Regulations the FCA will follow the procedures described in DEPP 7.