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PERG 3A.4 Small electronic money institutions, mixed businesses, distributors, agents and exempt bodies

Q17. What criteria must we meet to be a small electronic money institution?

The relevant conditions are set out at regulation 13 and include the following:

  • your total business activities immediately before the time of registration generates an average outstanding electronic money that does not exceed 5 million euros;
  • the monthly average, over the period of 12 months preceding the application, of the total amount of payment transactions which are not related to the issuance of electronic money and are executed by you or your agents in the United Kingdom, must not exceed 3 million euros;
  • immediately before the time of registration you must hold such initial capital, if any, which is required in accordance with Part 1 of Schedule 2 to the regulations;
  • you must have taken adequate measures for the purposes of safeguarding electronic money holders' fund as set out at regulation 20;
  • you must satisfy the FCA that the persons responsible for the management of your electronic money and payment services are of good repute and possess appropriate knowledge and experience to issue electronic money and provide those payment services that you intend to undertake;
  • none of the individuals responsible for the management or operation of your business has been convicted of offences relating to money laundering, or terrorist financing or financial crime;
  • you must be a body corporate whose head office is in the United Kingdom;
  • you must comply with the registration requirements of the Money Laundering Regulations1 where they apply to you.

Q18. We satisfy the conditions for registration as a small electronic money institution - does that mean we have to register as one?

Not necessarily, there are other options available to you.


If your business does not currently exceed the thresholds referred to in the first two bullets at Q17, but you expect that it will, you may also wish to apply for authorisation rather than registration.

Q19. We are a firm providing non-financial products and services to the general public. Would it be possible for us to obtain authorisation as an electronic money institution?

Yes. One of the changes made by the Electronic Money Regulations is to allow electronic money institutions to undertake mixed business. So, electronic money institutions may, in addition to issuing electronic money, engage in the following activities:

  • the provision of payment services; and
  • the provision of operational and closely related ancillary services, including ensuring the execution of payment transactions, foreign exchange services, safe-keeping activities and the storage and processing of data; and
  • the operation of payment systems, as defined at regulation 2(1); and
  • business activities other than the issuance of electronic money.

Q20. We are a branch of a firm which has its head office outside the UK2. If we became an electronic money institution can we also engage in mixed business?

Yes, but you can only provide payment services that are linked to the issuance of electronic money. You cannot undertake any of the other payment services.

Q21. We act as agent for an electronic money institution. What is the scope of our activities under the regulations?

As such an agent you may provide payment services on behalf of your principal, but only if you are registered by them on the Financial Services Register. You may also distribute or redeem electronic money for your principal. You cannot however issue electronic money on their behalf.

Q22. We distribute and redeem electronic money. What is the scope of our activities under the regulations?

In some electronic money schemes an originator creates electronic money and then sells it to banks and other distributors. The latter then sell the electronic money to the public. In our view reference to the issuer of electronic money in the Electronic Money Regulations is a reference to the originator and not the distributor.

So, provided you are not:

you do not need to be authorised or registered under the Electronic Money Regulations. However, the electronic money institution that is acting as your principal should notify the FCA that you are acting as a distributor, see regulations 26 and 37 and Schedule 1.

You should also bear in mind that if, in distributing and redeeming electronic money, your activities amount to payment services you will need to consider whether you are required to be authorised or registered under the Payment Services Regulations2, see PERG 15 for further guidance.

Q23. We have been registered by one of our principals as an agent under the Payment Services Regulations. If we wish to act as agent for an electronic money institution as well will we need to be registered again?

Yes. If your principal is an electronic money institution, it is its responsibility to apply for registration on your behalf even if you have been registered as agent under the Payment Services Regulations. You2 are required to be registered on the Financial Services Register before you provide payment services for your principal, subject to any relevant transitional provisions which may delay or avoid the need for registration. 2

Q24. We are a credit union. Are we exempt from the regulations?

Yes, in part. You are exempt from the authorisation and registration requirements in the regulations. However, if you wish to issue electronic money you must ensure you have the relevant Part 4A permission. You will also be subject to the safeguarding requirements in Part 3 and the redeemability provision in Part 5 of the Electronic Money Regulations.

Q25. We are a municipal bank. Are we exempt from the regulations?

Save that you are not subject to the safeguarding requirements in Part 3 of the regulations, your position is identical to that of credit unions, see Q24.