Regulations. entitled. European Communities (Electronic Money) Regulations 2002

Transcription

1 S.I. No. 221 of 2002 Regulations entitled European Communities (Electronic Money) Regulations 2002 Presentation No.: Price: 4.06

2 European Communities (Electronic Money) Regulations 2002 Arrangement of Regulations Part 1 Preliminary and general 1. Citation 2. Interpretation 3. Extension of meaning of "credit institution" in certain Regulations 4. Disclosure by Bank 5. Entry into force and transitional provisions Part 2 E-money and electronic money institutions 6. Issue of e-money 7. Status and activities of electronic money institutions 8. Prohibition on issuance of e-money at discount 9. Treatment of sums received in exchange for e-money 10. Limit to amount that can be issued as e-money 11. Redeemability Part 3 Establishment and general supervision of electronic money institutions 12. Authorisation to become an electronic money institution 13. Supervision, etc. by Bank of e-money institutions authorised in the State 14. Publication of names and notices of revocation of authorisations 15. Establishment of branch in another Member State 16. Provision of services into another Member State other than by branch establishment 17. Non-compliance in another Member State 18. Management 19. Waiver Part 4 Financial requirements, exposure and market risks 20. Initial capital and ongoing own funds requirement 21. Investment of funds 22. Statement of compliance 23. Large exposure 24. Market risks 25. Accounts

3 26. Mergers, etc. Part 5 Mergers Part 6 Revocation of authorisation, winding up and dissolution of electronic money institutions 27. Revocation of authorisation 28. Provisions supplemental to Regulation Winding up petition, etc. 30. Notices, documents to be sent to Bank relating to winding up or dissolution 31. Right of Bank to be represented at meetings, etc. 32. Construing of references to winding up 33. Provisions concerning appeals Part 7 Electronic money institutions authorised outside the State 34. Application to electronic money institutions authorised outside the State 35. Supervision, etc. by Bank of electronic money institutions authorised outside the State 36. Notification by electronic money institutions 37. Establishment in the State of branch of an electronic money institution authorised in another Member State 38. Investigations by competent authorities from other Member States 39. Change in information provided under Regulation 40. Provisions as to non-compliance in the State by electronic money institution authorised in another Member State 41. Direction by Bank to cease business Part 8 Offences and penalties 42. Offences 43. Provision of false information, etc. 44. Offences by bodies corporate 45. Continuation of contravention of Regulations 46. Prosecution by Bank

4 European Communities (Electronic Money) Regulations 2002 I, Charlie McCreevy, Minister for Finance, in exercise of the powers conferred on me by section 3 of the European Communities Act 1972 (No. 27 of 1972) and for the purpose of giving effect to Directive 2000/28/EC of the European Parliament and of the Council of 18 September and Directive 2000/46/EC of the European Parliament and of the Council of 18 September , hereby make the following regulations: Citation Part 1 Preliminary and general 1. These Regulations may be cited as the European Communities (Electronic Money) Regulations Interpretation 2. (1) In these Regulations, except where the context otherwise requires - associated body means (c) a subsidiary (within the meaning given by Regulation 4 of the European Communities (Companies: Group Accounts) Regulations 1992 (S.I. No. 201 of 1992)) of the electronic money institution, a corporate body which is a parent undertaking (within the meaning given by Regulation 3 of the European Communities (Companies: Group Accounts) Regulations 1992 ) of the electronic money institution, or a corporate body which is a subsidiary of the parent undertaking referred to at subparagraph ; authorisation means an authorisation issued by the following, under these Regulations, to an undertaking other than a credit institution to carry on the activity of issuing e-money: 1 OJ No. L , p OJ No. L , p.39

5 in the State, the Bank in any other Member State, the body or bodies charged by law with the authorisation of electronic money institutions; Bank means the Central Bank of Ireland; branch includes one or more places of business in the same Member State; Codified Banking Directive means Directive 2000/12/EC of the European Parliament and of the Council of 20 March ; competent authority means in relation to the State, the Bank, and in relation to any other Member State, the body or bodies charged by law in the Member State with the supervision of electronic money institutions; Court means High Court; credit institution means (c) (d) the holder of a licence under section 9 of the Central Bank Act 1971 (No. 24 of 1971), a building society incorporated or deemed to be incorporated under the Building Societies Act 1989 (No. 17 of 1989), a trustee savings bank within the meaning of the Trustee Savings Banks Act 1989 (No. 21 of 1989), a credit institution, as defined in the Codified Banking Directive that is authorised by a competent authority outside the State for the purposes of that Directive; electronic money means monetary value as represented by a claim against the issuer of it, that is 3 OJ No. L , p. 1

6 (c) stored on an electronic device, issued on receipt of funds of an amount not less in value than the monetary value issued, and accepted as a means of payment by undertakings other than that issuer, and reference to e-money means electronic money; electronic money institution means an undertaking, other than a credit institution, that issues means of payment in the form of e-money and is duly authorised to do so; initial capital means capital as defined in paragraph 2(1) of Article 34 of the Codified Banking Directive, and items defined in paragraph 2(2) of that Article; issued, in relation to electronic money, means electronic money which has been issued but not redeemed; Member State means a Member State of the Community; own funds has the same meaning as it has in the Codified Banking Directive; Principal Directive means Directive 2000/46/EC of the European Parliament and of the Council of 18 September 2002; "Principal Regulations" means the European Communities (Licensing and Supervision of Credit Institutions) Regulations 1992 (S.I. No. 395 of 1992); zone A has the same meaning as it has in Article 1.14 of the Codified Banking Directive. (2) In these Regulations a reference to a Regulation is a reference to a Regulation of these Regulations, unless it is indicated that reference to some other Regulations is intended, and

7 a reference to a paragraph or subparagraph is a reference to the paragraph or subparagraph of the provision in which the reference occurs, unless it is indicated that reference to some other provision is intended. (3) A word or expression that is used in these Regulations and is also used in the Principal Directive has, unless the contrary intention appears, the same meaning in these Regulations as it has in the Principal Directive. A word or expression that is used in these Regulations, is not used in the Principal Directive but is used in the Codified Banking Directive, has, unless the contrary intention appears, the same meaning in these Regulations as it has in the Codified Banking Directive. Extension of meaning of "credit institution" in certain Regulations 3. (1) Regulation 2 of the Principal Regulations is amended by substituting the following for the definition of credit institution in paragraph (1): credit institution means -- and an undertaking, other than a credit union or friendly society, whose business it is to receive deposits or other repayable funds from the public and to grant credit on its own account, to the extent specified in paragraph (1A), an electronic money institution within the meaning of the European Communities (Electronic Money) Regulations 2002;, by inserting the following after paragraph (1): (1A) References to a credit institution in Regulations 2 and 5, Regulations 7 to 10 and Regulations 17, 30 and 31 include, where the context so admits and with any necessary modifications, references to an electronic money institution within the meaning of the European Communities (Electronic Money) Regulations

8 (2) Regulation 2 of the European Communities (Consolidated Supervision of Credit Institutions) Regulations 1992 (S.I. No. 396 of 1992) is amended by substituting the following for the definition of credit institution in paragraph (1): credit institution means -- and an undertaking, other than a credit union or friendly society, whose business it is to receive deposits or other repayable funds from the public and to grant credit on its own account, to the extent specified in paragraph (1A), an electronic money institution within the meaning of the European Communities (Electronic Money) Regulations 2002;, by inserting the following after paragraph (1): (1A) References to a credit institution these Regulations include, where the context so admits and with any necessary modifications, references to an electronic money institution within the meaning of the European Communities (Electronic Money) Regulations (3) The Supervision of Credit Institutions, Stock Exchange Member Firms and Investment Business Firms Regulations 1996 (S.I. No. 267 of 1996) are amended in Regulation 2 by inserting the following after paragraph (1): (1A) References to a credit institution in these Regulations include, where the context so admits and with any necessary modifications, references to an electronic money institution within the meaning of the European Communities (Electronic Money) Regulations Disclosure by Bank 4. Nothing in section 16 of Central Bank Act 1989 shall prohibit the disclosure of information by the Bank where such disclosure is required by and or is necessary for the discharge by the Bank of a function imposed by virtue of these Regulations and is made in accordance with Article 30 of the Codified Directive. Entry into force and transitional provisions 5. (1) An existing issuer shall, subject to paragraph (2), be deemed to be authorised by the Bank under Regulation 12.

9 (2) Every electronic money institution in the State to which paragraph (1) relates shall submit all relevant information to the Bank in order to allow it to assess, within 6 months of 27 April if the institution complies with the requirements of these Regulations for the issue of an authorisation, and where the institution, in the opinion of the Bank, does not so comply, whether or not the institution has undertaken the measures needed to ensure compliance with these Regulations, and where the issuer has not so complied by that date, if revocation of the authorisation is appropriate in the circumstances. (3) In paragraph (1) existing issuer means a body corporate or partnership, other than a credit institution, which, immediately before 27 April 2002 has its head-office in the State, and is carrying on by way of business the activity of issuing e- money. Part 2 E-money and electronic money institutions Issue of e-money 6. (1) Only the following may issue e-money (c) a credit institution; an electronic money institution; a credit institution (within the meaning given in Article 1, point 1 of the Codified Banking Directive) that is referred to in paragraph 3 of Article 2 of the Codified Banking Directive. (2) It is an offence for a person, other than a person referred to in paragraph (1), to issue e-money. Status and activities of electronic money institutions

10 7. (1) Only the following may be authorised by the Bank to be an electronic money institution: a body corporate, or a limited partnership within the meaning of the Limited Partnerships Act 1907 or any other partnership. (2) An electronic money institution may carry on the following business activities: issue of e-money in compliance with these Regulations, the provision of closely related financial and non-financial services including (i) (ii) services of an administrative, operational and ancillary nature that are so related to the issue of e-money, and the issuing and administering of other means of payment, other than in so far as would relate to the granting of any form of credit; (c) (d) storage of data on electronic money devices on behalf of other undertakings or public institutions, activities closely related to the activities referred to in any or all of subparagraphs,, and (c) that are carried on for the purpose of any activity so referred to. (3) The Bank may set down criteria, from time to time, in relation to the matters set out in paragraph (2) where it considers it in the interest of the orderly and proper regulation of the financial services sector. (4) An electronic money institution may have an interest in another undertaking but only if the main objects for which that undertaking was formed was to carry out operational functions which are ancillary, or supplemental to the main objects for which the electronic money institution was formed. Prohibition on issuance of e-money at discount 8. In a transaction, an electronic money institution shall not issue e-money if it receives funds in respect of the transaction that have a value that is less than the value of the e-money.

11 Treatment of sums received in exchange for e-money 9. A sum or sums of money which, upon receipt, is immediately exchanged for e-money shall not be treated as if it were a repayable fund for the purposes of the Central Bank Acts 1942 to1998, or a deposit within the meaning given by section 2(2) of the Central Bank Act 1997 (No. 8 of 1997). Limit to amount that can be issued as e-money 10. The maximum storage capacity of each issued electronic device shall not exceed 5,000.

12 Redeemability 11. (1) Every e-money transaction shall be covered by a contract between the issuing institution and the bearer of the e-money. (2) A contract to which paragraph (1) relates shall state the conditions under which the issuer shall redeem the e-money if the bearer requests redemption. (3) A contract to which paragraph (1) relates may specify a minimum threshold for redemption of e-money by the issuer of it. (4) During the period of validity, the bearer of e-money may request that the electronic money institution or the issuing credit institution, as the case may be, redeem the nominal value in cash or by means of a transfer to an account without any cost other than that strictly necessary to complete such a transaction. (5) The minimum amount that an issuer may impose under paragraph (3) shall not be more than 10. A person who does not comply with subparagraph is guilty of an offence. Part 3 Authorisation and general supervision of electronic money institutions Authorisation to become an electronic money institution 12. (1) Subject to these Regulations, the Bank may grant or refuse to grant to any undertaking applying to it an authorisation to issue e-money. (2) The Bank shall not refuse an authorisation without the consent of the Minister and unless it is satisfied that the authorisation would not be in the interest of the orderly and proper regulation of the financial services sector. The Minister shall not grant his or her consent to the refusal unless satisfied that the authorisation would not be in the interest of the orderly and proper regulation of the financial services sector.

13 (3) Whenever the Bank proposes to refuse an authorisation to an undertaking, it shall notify the undertaking (i) (ii) that it intends to seek the consent of the Minister to the proposed refusal, and of its reasons for the refusal and that the undertaking may, within the period of 21 days after the date of the giving of the notification, make representations in writing to the Minister in relation to the proposed refusal, and the undertaking may make representations in writing to the Minister within that time. The notification by the Bank under subparagraph to the undertaking concerned shall be (i) (ii) within 6 months of the date of receipt of the application for the authorisation, or where additional information in relation to the application has been sought by the Bank (I) (II) within 6 months of the date of receipt by the Bank of the additional information, or within 12 months of the date of the receipt of the application for the authorisation, whichever period first expires. (c) The Minister shall, before deciding to give or withhold his or her consent for the purposes of this Regulation, consider any representations duly made to him or her under this Regulation in relation to the proposed refusal. (4) An application for an authorisation shall be in such form and contain such particulars as the Bank may, from time to time, determine in the interest of the orderly and proper regulation of the financial services sector. (5) The authorisation under this Regulation of an undertaking as an electronic money institution shall not constitute a warranty as to the solvency of the undertaking to issue e-money and the Bank shall not be liable in respect of any losses incurred through the insolvency or default of the electronic money institution.

14 (6) In this Regulation Minister means the Minister for Finance.

15 Supervision, etc, by Bank of electronic money institutions authorised in the State 13. (1) An electronic money institution authorised in the State shall comply with such directions, supervisory and reporting requirements or conditions relating to its business which the Bank considers appropriate to impose on it from time to time for the purposes and in the interest of the proper and orderly regulation of the financial services sector. (2) Without prejudice to the generality of paragraph (1), directions, supervisory and reporting requirements or conditions may include those which correspond to directions, supervisory and reporting requirements or conditions which the Bank may impose, in respect of any holder of a licence under section 9 of the Central Bank Act 1971, for the purposes of the Central Bank Acts 1942 to Publication of names and notices of revocation of authorisations 14. (1) The Bank shall publish from time to time, but not less frequently than once a year, in such manner as it thinks fit the names of- (c) electronic money institutions that issue e-money in the State, credit institutions that issue e-money in the State, electronic money institutions in respect of which a certificate under Regulation 19 has been issued and is in force, (2) The Bank shall as soon as may be after the revocation of an authorisation, publish a notice of the revocation in such manner as it thinks fit. Establishment of branch in another Member State 15. (1) For the purposes of the mutual recognition of the provision of services relating to the issuance of e-money in the Community, the Bank shall, where appropriate, certify that the electronic money institution concerned is established in the State and is duly authorised by it to act as an electronic money institution. Certification for the purposes of subparagraph shall be in such form and containing such particulars as the Bank may decide. (2) An electronic money institution authorised by the Bank which proposes to establish a branch in another Member State shall notify the Bank in advance of establishing the branch and shall provide the following information:

16 the name of the Member State in which the branch is to be established; a scheme setting out - (i) (ii) the proposed programme of operations of the branch, and the manner in which the activities of the branch will be organised, together with such other matters as the Bank may require to be set out in the scheme; (c) (d) the names of the persons who will be responsible for the management of the branch; and the address in the Member State in which the branch is to be so situated and at which the Bank may serve a notice to obtain such documents as it requires concerning the operations of the electronic money institution in that Member State. (3) Subject to paragraph (5), the Bank shall transmit the information referred to in paragraph (2) to the competent authority of the Member State concerned not later than 3 months after the receipt of the information required under paragraph (2) from the electronic money institution concerned, and shall inform that institution that it has so transmitted the information. (4) The Bank shall also transmit to the competent authority in the Member State concerned a statement setting out the amount of the own funds of the electronic money institution concerned. (5) The Bank shall refuse to transmit the information referred to in paragraphs (2) and (3) to the competent authority of another Member State in any case in which the Bank is of the opinion that the electronic money institution concerned does not possess sufficient financial resources or adequate managerial capacity to carry on business in that other Member State. (6) Where the Bank exercises its functions under paragraph (5), it shall inform the electronic money institution concerned, in writing, of the reasons for the refusal within 3 months of receipt from the institution of all of the information required under paragraph (2). (7) Where, under this Regulation, the Bank informs the electronic money institution that it refuses to transmit the relevant information to the competent

17 authority of the Member State concerned, the institution may appeal to the Court in a summary manner within one month, or such longer period as the Court considers just and equitable in the circumstances, of the refusal, against the refusal by the Bank. (8) Where the Court allows the appeal, it shall direct the Bank to transmit the information to the competent authority in the Member State concerned within such period of time as the Court may specify. (9) The Court may make such order as it sees fit directing the applicant to supply specified information to the Bank for the purposes of this Regulation, or to comply with a requirement of the Bank in relation to the information to be provided to the Bank under this Regulation. (10) In relation to an appeal to the Court under this Regulation, the Court may make such order, if any, as to costs as it considers appropriate. (11) Where the Court is satisfied, because of the nature or the circumstances of the case or otherwise in the interest of justice, that it is desirable, the whole or any part of proceeding under this Regulation may be heard otherwise than in public. Provision of services into another Member State other than by branch establishment 16. (1) Where an electronic money institution duly authorised in the State proposes to carry on the business of issuing e-money in another Member State, other than by means of establishing a branch in that Member State, it shall notify the Bank of the name of that Member State and of that proposal. (2) Paragraph (1) does not apply to an electronic money institution which, on 27 April 2002, already carries on any business in the Member State concerned by means of the provision of services in that Member State. (3) The notification referred to in paragraph (1) is required on the first occasion only on which the electronic money institution proposes to carry on the business of issuance of e-money in the other Member State concerned. (4) The Bank shall, within one month of receipt of the notification, forward the information in it to the competent authority of the other Member State specified in the notification.

18 (5) Nothing in this Regulation shall remove any existing requirements on an electronic money institution to seek the permission of the Bank under any supervisory enactment to carry on business outside the State either generally or in respect of any particular class or classes of activities. Non-compliance in another Member State 17. Where the Bank receives a notice from the competent authority in another Member State for the purposes of the implementation of paragraph 3 of Article 22 of the Codified Directive that an electronic money institution authorised by the Bank is not complying with a requirement of that other competent authority, the Bank shall take such measures as it considers appropriate to require the institution to comply with the requirement and shall advise that other competent authority of those measures. Management 18. (1) Every electronic money institution authorised by the Bank shall manage its business in accordance with sound administrative and accounting principles and shall put in place and maintain internal control and reporting arrangements and procedures to ensure that the business is so managed. (2) Every electronic money institution shall ensure it has adequate systems, procedures and practices in place to secure an effective response, should the need arise, to any financial and non-financial risks to which the institution may be exposed, including any technical and procedural risks, or risks connected to its co-operation with any undertaking performing ancillary operations or functions relating to the institution s business activities. (3) The Bank may direct an electronic money institution, or an associated body, to furnish to it, within a specified period, such information relating to the arrangements and procedures referred to in paragraphs (1) and (2) as the Bank may require and the institution concerned shall comply with that direction. Waiver 19. (1) Subject to the other provisions of this Regulation, an electronic money institution authorised under these Regulations may apply to the Bank for the issue of a certificate that some or all of the following provisions shall not apply to it, or shall not apply to it for particular purposes

19 insofar as they relate to subparagraphs to (g), as appropriate, Regulations 2 and 3, Regulations 4 to 7, (c) as provided for in paragraph (4), Regulations 15 and 16, (d) Regulation 18(3), (e) Regulations 20 to 24, (f) Regulation 26, (g) Regulations 29 to 32. (2) The Bank shall issue a certificate referred to in paragraph (1) to an electronic money institution only where the institution s business consists of electronic devices with a maximum storage capacity of 150 issued by it, and the Bank is satisfied that- (i) (ii) the financial liabilities relating to issued e-money of the electronic money institution concerned does not usually exceed 5,000,000 and never exceeds 6,000,000, the issued e-money concerned is not accepted as a means of payment by any undertaking except- (I) (II) (III) (IV) a subsidiary of the electronic money institution which performs functions related to the issue or distribution of the e-money by the electronic money institution, a corporate body which is a parent undertaking of the electronic money institution, a corporate body which is a subsidiary of the parent undertaking referred to at subparagraph (ii), or where the electronic money institution is a partnership, a partner in the partnership, or

20 (iii) the issued e-money concerned is accepted as a method of payment by not more than 100 undertakings where each undertaking - (I) (II) carries on business at the same premises or limited local area as the electronic money institution, or has a close financial or business relationship with the issuing institution, such as a common marketing or distribution scheme, and that, where clause (ii) or (iii) of paragraph applies, the amount of e-money issued or to be issued shall not at any one time exceed 10,000,000. (3) Where the Bank issues a certificate under paragraph (2) it may attach such other conditions to the certificate as it considers appropriate for the orderly and proper regulation of electronic money institutions in the State. (4) An electronic money institution to which a certificate has been issued under paragraph (2) shall not benefit from the mutual recognition arrangements provided for in Regulations 15 and 16. (5) If a certificate is issued to an electronic money institution under paragraph (2), that electronic money institution shall comply, within 7 days, with any request for information that it receives from the Bank, in relation to- (c) its issued e-money, its compliance with any condition imposed by the Bank under paragraph (3), or any of its other affairs. (6) The Bank may make a request for information under paragraph (5) at any time it considers appropriate but shall make such a request, in respect of subparagraph and of that paragraph, at least every 12 months. (7) The Bank may revoke a certificate issued under this Regulation if it is satisfied that- any- (i) condition referred to in paragraph (3),

21 (ii) (ii) direction or requirement duly imposed by the Bank, or other requirement of law, has not been complied with by the electronic money institution, (c) the electronic money institution furnished false, misleading or inaccurate information to the Bank relating to its application for the certificate, or it is in the interest of the proper and orderly regulation of electronic money institutions in the State. (8) An electronic money institution that holds a certificate issued to it by the Bank under this Regulation may apply to the Bank to revoke the certificate. As soon as practicable after receipt by it of the application under subparagraph, the Bank shall (i) (ii) issue the revocation, subject to any conditions that it deems appropriate, and notify the electronic money institution in writing of the revocation and of any conditions attaching to it. (9) In paragraph (2), subsidiary and parent undertaking have the same meanings, respectively, as they have in the definition of associated body in Regulation 2. In paragraph (2)(iii)(II) business relationship does not include a business scheme which consists only of acceptance, by an undertaking, of e-money issued by an electronic money institution Part 4 Financial requirements, exposure and market risks Initial capital and ongoing own funds requirement 20. (1) The Bank shall not issue an authorisation under these Regulations unless it is satisfied that the electronic money institution has initial capital of at least 1,000,000. (2) The own funds of an electronic money institution

22 shall not fall below 1,000,000, and shall not fall below an amount equal to 2 per cent of -- (i) the current financial liabilities relating to its issued e- money, or (ii) the average of the preceding 6 months total amount of its financial liabilities related to issued e-money, whichever is the greater amount. (3) In relation to the issued e-money of an electronic money institution that has not completed 6 months as an electronic money institution, the own funds shall not fall below an amount equal to 2 per cent of the current amount of financial liabilities relating to its issued e-money, or the amount of financial liabilities relating to its issued e-money which it has targeted in its 6 months business plan to have issued, whichever is the greater amount. The business plan referred to in paragraph is subject to review by the Bank and to any adjustment required by the Bank. Investment of funds 21. (1) Subject to paragraph (3), an electronic money institution shall have investments, which are not less than its financial liabilities relating to its issued e- money, in one or more of the following: cash or its equivalent; sufficiently liquid assets issued by and representing a claim on, or fully guaranteed by (i) central governments or central banks within zone A, (ii) (iii) the European Communities, or the European Central Bank; (c) demand deposits with credit institutions within zone A; (d) debt instruments, as determined by the Bank, which are qualifying items for the purposes of paragraph 12 of Article 2

23 of Council Directive 93/6/EEC of 15 March 1993 on the capital adequacy of investments firms and credit institutions 4 ; (e) assets within the meaning of paragraph 1 of Article 44 of the Codified Banking Directive which are sufficiently liquid; (2) For the purposes of applying paragraph (1), the assets shall be valued at the lower of cost or market value. (3) If the value of the assets concerned falls below the value of the electronic money institution s financial liabilities relating to its issued e-money, then the Bank may consent to investment by the institution in assets other than those referred to in subparagraphs to (e) of paragraph (1) but only if the electronic money institution applies to the Bank for such consent, and the electronic money institution invests assets in this manner that have a value that is the lesser of (i) the value of its own funds, or (ii) 5 per cent. of the financial liabilities in relation to its e- money. (4) The consent of the Bank referred to in paragraph (3) shall be for a period of time determined by the Bank for the purposes of these Regulations but shall not exceed 6 months. Statement of compliance 22. (1) Every electronic money institution shall provide the Bank with a statement of compliance with the provisions of Regulations 20 and 21. The statement shall be provided at least every 6 months, or every such shorter period as may be determined by the Bank from time to time. (2) The Bank shall specify the form and content of a statement submitted under paragraph (1) and, where it considers it appropriate, the means and procedures by which any figures are calculated. 4 OJ No L 141, 11/06/1993 p. 1

24 Large exposure 23. (1) The Bank shall make rules in relation to (i) (ii) the calculation by every electronic money institution to establish if it has a large exposure, and if the electronic money institution concerned has a large exposure, the reporting by it of that to the Bank. In this paragraph large exposure has the same meaning as it has in paragraph 1 of Article 48 of the Codified Banking Directive. (2) Funds of an electronic money institution invested in one or more of the following demand deposits with credit institutions within zone A; debt instruments, as determined by the Bank, which are qualifying items for the purposes of paragraph 12 of Article 2 of Council Directive 93/6/EEC of 15 March 1993 on the capital adequacy of investments firms and credit institutions; shall not exceed a value that is 20 times the value of the own funds of the electronic money institution.

25 Market risks 24. (1) The Bank shall make rules for the purposes of paragraph 3 of Article 5 of the Principal Directive on the type of instruments to be used to eliminate exposure to market risks by an electronic money institution as a result of issuing of e-money, or investing in funds in accordance with Regulation 21(1). (2) The Bank shall impose such limitations as it considers appropriate on market risks that electronic money institutions may incur as a result of investing in funds in accordance with Regulation 21(1). Accounts 25. At the end of each period of 12 months, every electronic money institution shall submit its accounts to the Bank. The form of such accounts and manner of submission may be specified by the Bank from time to time. Mergers etc. Part 5 Mergers 26. (1) This Regulation applies to all acquisitions of shares or other interests by any person in an electronic money institution authorised by the Bank. (2) For the purposes of this Regulation, Regulation 14, other than paragraphs (1) and (13), of the Principal Regulations applies to electronic money institutions that are carrying on business in the State. (3) Where the Bank is of the opinion that a direction under Regulation 14(10) of the Principal Regulations has not been complied with by the person concerned, or has not been complied with within the specified period of time, the Bank may, without prejudice to any other functions of the Bank, do any one or more of the following: issue a direction to the electronic money institution concerned to suspend issuance of e-money. apply to the Court in a summary manner

26 (i) (ii) (iii) (iv) for an injunction prohibiting the person concerned from issuing directions to directors or to any manager, secretary, officer or staff of, or persons engaged by the electronic money institution and prohibiting any director, manager, secretary, officer or any other person acting on behalf of the institution from seeking directions from, or consulting the person concerned, or from acting on such directions without the consent of the Bank; to suspend the exercise by the person concerned of any interest in or voting rights held by that person in respect of the institution concerned; for an order from the Court requiring the person concerned to dispose of some or all of his or her shareholding, interests or rights in the institution concerned within a period specified by the Court; or for such order as the Court considers appropriate. Part 6 Revocation of authorisation, winding up and dissolution of electronic money institutions Revocation of authorisation 27. (1) In the interest of the proper and orderly regulation of electronic money institutions authorised in the State, the Bank may, subject to paragraph (3), revoke the authorisation of an electronic money institution in any of the following cases: at the request of the institution itself, where the institution does not commence activities within 12 months after authorisation was issued, (c) (d) (e) (f) where the institution does not carry out commercial activities for a period of more than 6 months; where the institution has obtained the authorisation through false statements or any other irregular means; where the institution no longer fulfils the conditions under which authorisation was issued; where the institution no longer possesses sufficient own funds or can no longer be relied on to fulfil its obligations towards its

27 creditors, and in particular no longer provides security for the assets entrusted to it; (g) (h) where the institution is guilty of gross or repeated violations of provisions laid down in these Regulations; where (i) (ii) the business or corporate structure of the institution has been so organised, or the institution has come under the control of any other undertaking not supervised by the Bank, such that the institution is no longer capable of being supervised to the satisfaction of the Bank; (i) (j) (k) (l) (m) (n) where the Bank is of the opinion that the institution is conducting business in such a manner as to jeopardise and prejudice the rights and interests of bearers of e-money issued by it; where the institution is under common control with one or more than one other enterprise (whether or not any such other enterprise is supervised or authorised by the Bank) and the Bank is of the opinion that the common control (as interpreted in paragraph (6) is not in the interest of persons who are the bearers of e-money issued by the institution; where, being a company, it is being wound up; being a partnership, the partnership is dissolved by death or bankruptcy of any partner, or otherwise under the law of partnership, where the institution is convicted on indictment of an offence involving fraud, dishonesty or breach of trust; where it is otherwise in the interest of the orderly and proper regulation of electronic money institutions in the State. (2) Where the own funds of an electronic money institution to which Regulation 5 relates do not meet the initial capital requirement set in accordance with Regulation 20(2), then the Bank may specify a time limit, which is not later than 6 months after 27 April 2002, within which those funds shall be brought up to the required minimum. The Bank may revoke the authorisation if the electronic money institution concerned fails to meet the initial capital requirement within the time limit so specified.

28 (3) In respect of any of the matters set out at subparagraphs to (n) of paragraph (1), the Bank may give a direction in writing to the institution concerned to suspend all or any of the following for such period, not exceeding 6 months, as shall be specified in the direction: (c) the carrying on of the institution s business activities in relation to issuance of e-money which have not been authorised by the Bank; the making of payments to which subparagraph does not relate which have not been authorised by the Bank; the acquisition or disposal of other assets or liabilities which have not been authorised by the Bank. (4) Whenever the Bank proposes to revoke an authorisation it shall notify in writing the issuer concerned (c) that it intends to revoke the authorisation, of the reasons for the revocation, and that the issuer may, within 21 days after the date of the giving of the notification, make representations in writing to the Bank in relation to the proposed revocation. (5) Where the Bank revokes an authorisation, it shall notify the European Commission. (6) For the purposes of paragraph (1)(j), the electronic money institution concerned and one or more than one other enterprise shall be deemed to be under common control if the decision as to how or by whom each shall be managed can be made by the same person or is made by the same group of persons acting in concert. Provisions supplemental to Regulation (1) Subject to subparagraph, this Regulation applies where an authorisation of an electronic money institution is revoked. In respect of subparagraph (k) or (l) of Regulation 27(1) this Regulation applies to the extent specified in paragraph (15). (2) The institution shall continue to be subject to the duties and obligations imposed on the institution under these Regulations, until all liabilities of the

29 institution in respect of its issued e-money have been discharged to the satisfaction of the Bank. (3) The institution shall, as soon as possible after the authorisation has been revoked, notify the Bank of the measures it is taking or proposes to take to discharge in full and without undue delay, its liabilities in respect of its issued e- money. (4) In the case where the institution has notified the Bank in accordance with paragraph (3) and the Bank is of the opinion that the measures being taken or proposed to be taken for the purposes of that paragraph are not satisfactory, or the institution has not so notified the Bank and the Bank is of the opinion that the institution has failed to so notify as soon as possible after the authorisation is revoked, then the Bank may give a direction, in writing, to the institution for such period, not exceeding 6 months, as may be specified therein, prohibiting it from (i) (ii) (iii) dealing with or disposing of any of its assets in any manner, or engaging in any transaction or class of transaction in relation to the issuance of e-money, or making payments without the prior authorisation of the Bank, and the Bank may require the institution to prepare and submit to it, for its approval within 2 months of the direction, a scheme for the orderly discharge, in full, of its liabilities in relation to its issued e-money. (5) Where a direction to which Regulation 27(3) relates is given, the Bank may revoke such a direction, unless an order under paragraph (7) has been made in respect of the direction. (6) The electronic money institution to which a direction is given under Regulation 27(3) may apply to the Court for, and the Court may grant, an order setting aside the direction. (7) The Bank may apply to the Court for, and the Court may grant an order confirming a direction given under Regulation 27(3), or confirming the direction and, subject to paragraph (8), extending the period of its operation for such time, not

30 exceeding the period of 12 months from the date the direction commenced to have effect, as the Court may, having regard to all the circumstances, consider appropriate. (8) A direction to which paragraph (7) relates shall cease to have effect (c) (d) (e) where the direction was confirmed, upon the expiration of the period to which the direction relates, where the direction was confirmed and the period of its operation was extended, upon the expiration of that extended period, from such date as the Court, by order, determines on a subsequent application to it by the Bank, upon the making of a winding up order in respect of the institution concerned, or where the Court is of the opinion that the circumstances which gave rise to the direction have ceased to exist and that it would be unjust and inequitable not to make an order to that effect, from such date as the Court, by order, determines, whichever first occurs. (9) The Court may, in addition to or instead of making an order under paragraph (6) or (7), make such other order in relation to the matter as may appear to it to be necessary, including an order directing any person who holds money or other assets for or on behalf of the institution to which the direction relates, not to dispose of any of those assets except on such conditions and in such circumstances as are specified in the order. then (10) Where a direction to which Regulation 27(3) relates is still in force, (c) winding up or bankruptcy proceedings shall not be initiated in relation to the electronic money institution to which the direction was given, a receiver over the property of that institution shall not be appointed, and the property of that institution shall not be attached, sequestered or otherwise distrained, unless the prior approval of the Court has been obtained.

31 (11) Where it appears to the Bank that an electronic money institution to which the direction was given under Regulation 27(3) is able to meet its obligations to its creditors but the circumstances which gave rise to the direction are unlikely to be rectified, then the Bank shall, forthwith, apply to the Court for, and the Court may grant, an order directing the institution to prepare, in consultation with the Bank, a scheme for the orderly termination of its business relating to the issuance of e- money, and the discharge of its liabilities in relation to its issued e-money, under the supervision of the Bank and to submit the scheme to the Court within 2 months for the Court s approval. (c) The Court shall not approve the terms of the scheme to which subparagraph relates without hearing the Bank and, in the event of any dispute concerning the terms of the scheme, either or both the Bank and the electronic money institution concerned may apply to the Court to adjudicate on the matter. If the electronic money institution to which an order under subparagraph relates fails to comply with that order or fails to adhere to the scheme approved by the Court, the Bank may apply to the Court for and the Court may make such further order as it considers appropriate, including (i) (ii) (iii) an order of committal, where the institution is a body corporate, a winding up order on the grounds that it is just and equitable that the institution should be wound up, or where the institution is a partnership, a decree of dissolution on the grounds that it is just and equitable that the institution should be dissolved. (12) Where a winding up order is made in proceedings brought under this Regulation against an electronic money institution to which a direction was given under Regulation 27(3), then the law relating to companies (including these Regulations) shall apply in the same way as if the order had been made on a winding up petition under that law and as if, for any reference in that law to the presentation of the winding up petition, there were substituted a reference to the making of the winding up order under this Regulation. Where the electronic money institution is a partnership, and the Bank has applied by petition to the Court for a decree of dissolution, then for that purpose, section 35 of the Partnership

32 Act 1890 shall extend to the Bank and shall apply as if the relevant grounds for dissolution under this paragraph were incorporated in that section. (13) Where the Court is satisfied, because of the nature or the circumstances of the case or otherwise in the interests of justice, that it is desirable, the whole or any part of proceedings under this section may be heard otherwise than in public. (14) The Court may, by order, revoke or amend an order made by it under this section. (15) Where (i) (ii) an authorisation is revoked and the undertaking concerned is being wound up or dissolved, and but for this paragraph paragraphs (2) to (14) would not apply, then the provisions of this Regulation relating to the person responsible for the winding up or dissolution shall, in addition to his or her other duties and obligations, be subject to the specified duties and obligations to which the undertaking would be subject were it an undertaking to which this Regulation relates. Notwithstanding paragraph, the Bank may, where it revokes an authorisation and considers it appropriate in the circumstances (i) (ii) remove in writing the specified duties and obligations imposed on the person responsible for the winding up or dissolution concerned, or impose in writing other duties and obligations which correspond to the specified duties and obligations. (c) In this paragraph specified duties and obligations means those duties and obligations arising out of this Regulation (other than this paragraph) which relate to notification to the Bank regarding actions taken to discharge all liabilities. Winding up petition, etc.

33 29. (1) Notwithstanding section 215 of the Companies Act 1963, the Bank may, by presenting a petition, apply to the Court to have an electronic money institution wound up on any of the following grounds: that the issuer has failed to comply with a direction of the Bank under these Regulations and the Court has not set aside the direction; that the authorisation has been withdrawn and the issuer has ceased to carry on the activity of issuing e-money. (2) The Bank shall be notified of any application for a petition for the winding up of an electronic money institution before the petition is presented. (3) Where an electronic money institution is being wound up voluntarily and the Bank has reason to believe that any of the grounds set out in paragraph (1) of this Regulation or Regulation 28(1)(f) apply, then the Bank may apply to the Court to have the electronic money institution wound up by the Court. (4) Where the electronic money institution is a partnership, the Bank may apply by petition to the Court for a decree of dissolution and for that purpose, section 35 of the Partnership Act 1890 shall extend to the Bank and shall apply as if the grounds specified in paragraph (1) were incorporated in that section.