ELM 2.2 Purpose

This chapter requires ELMIs to have a minimum amount of capital.

In addition, threshold condition 4 says that the resources of the [firm] must, in the opinion of the [FSA], be adequate in relation to the regulated activities that he seeks to carry on, or carries on. Principle 4 also requires all firms 'to maintain adequate financial resources'.

The purpose of the capital requirements in this chapter is to:

1. (1)

   help an ELMI to maintain itself as a viable going concern, to overcome expected and unexpected difficulties and to sustain its infrastructure;

2. (2)

   help an ELMI to secure, in conjunction with the asset-liability management requirements in ELM 3, its ability to redeem e-money whenever redemption may be required; and

3. (3)

   help to maintain public confidence in an ELMI's ability to redeem e-money as and when required.

This chapter implements article 4 of the E-Money Directive.