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ELM 4.3 Restriction to issuing e-money and related activities

Restriction on activities

ELM 4.3.1R

A firm must not undertake or carry on business activities other than issuing e-money, except for those in ELM 4.3.2 R.

ELM 4.3.2R

The activities referred to in ELM 4.3.1 R are:

  1. (1)

    the provision of financial and non-financial services closely related to issuing e-money, such as:

    1. (a)

      the administering of e-money by the performance of operational and other ancillary functions related to its issuance; and

    2. (b)

      the issuing and administering of other means of payment; and

  2. (2)

    the storing (on behalf of other undertakings or public institutions) of data on e-money electronic devices on which e-money issued by the firm is stored or which can be used to use or spend e-money issued by the firm;

but excluding the granting of any form of credit.

ELM 4.3.3G

The activities permitted by ELM 4.3.2 R include distributing e-money issued by another person.

Restriction on giving credit

ELM 4.3.4R

A firm must not grant any credit in the course of or for the purpose of the business of issuing e-money.

ELM 4.3.5G

ELM 4.3.2 R and ELM 4.3.4 R together prevent a firm from granting credit. Granting credit includes making loans.

ELM 4.3.6G

If a person buys e-money from a firm and pays for it by cheque (so that the firm does not immediately receive value for it) that does not amount to granting credit under ELM 4.3.4 R.

Restriction on interest

ELM 4.3.7R

A firm must not pay interest or any similar sum on e-money issued by it.

ELM 4.3.8G

A firm may issue e-money in the way described in ELM 4.4.2 G without infringing ELM 4.3.7 R.

Restriction on holdings in other undertakings

ELM 4.3.9R

A firm must:

  1. (1)

    not have an ownership share; and

  2. (2)

    ensure that no member of its sub group has any ownership share;

in another undertaking except in an undertaking that falls into ELM 4.3.11 R.

ELM 4.3.10R

A firm must ensure that the only other members of its sub group are ones that fall into ELM 4.3.11 R.

ELM 4.3.11R

An undertaking only falls into this rule if its only activity is the performance of operational or other ancillary functions related to e-money issued or distributed by the firm referred to in ELM 4.3.9 R or ELM 4.3.10 R.