Gibraltar Electronic Money Institutions License

Gibraltar Electronic Money Institutions License E-money is electronically, including magnetically, stored monetary value, represented by an issuer which is accepted by a person other than the electronic money issuer. Types of E-money include pre-paid cards and electronic pre-paid accounts for use online. The regulation of Gibraltar E-money Institutions falls within the scope of the Financial Services (Banking) Act 1992 and, specifically, the Financial Services (Electronic Money) Regulations 2011 (“the Regulations”). E-money Institutions should ensure that they comply with all subsidiary legislation to the Act. An E-money Institution is authorized to issue and redeem E-money and this can be done either via a proper establishment or through an Agent or Distributor. There are two types of E-money Institutions

• Authorized E-money Institution; and
• Registered E-money Institution.

Both these types of E-money Institutions must meet certain standards and provide the necessary information so that the GFSC can monitor and supervise them effectively. You should note that registered E-money Institutions cannot passport their services.   Agents and Distributors An E-money Institution may appoint agents and distributors. Agents distribute and redeem e-money, and provide payment services. These must be registered with the GFSC. Distributors distribute and redeem E-money without providing payment services. The FSC must be notified of these. Neither an agent nor a distributor can issue E-money; this activity may only be carried out by the E-money Institution.   GFSC Policy In order to allow the GFSC to carry out its supervisory and regulatory functions, the GFSC has established a policy for the supervision of E-money Institutions. The following conditions are applied to all licenses issued to E-money Institutions. They must comply with money Institutions on an ongoing basis:

• The E-money Institution has to ensure that the issue of electronic money or other business carried out in reliance upon its license is not illegal in the country in which any electronic money is issued or other business carried out. Additionally, the E-money Institution must not provide any services which are out of the scope of the issued license to any person where the provision of such services would be illegal under the applicable law.
• Confirmation is required that any arrangements with Relevant Parties, Programme Managers and Processors satisfy the Commission’s requirements and that such arrangements enable the firm to directly exercise appropriate controls and step-in rights as required for regulatory purposes at any given time.
• The E-money Institution is required to notify the GFSC of any programme, Programme Manager or relevant party it enters into a new business relationship with.
• The E-money Institution must, at all times, be able to demonstrate that it is able to safeguard relevant funds and that any risks associated with relevant funds are being proactively managed, do not compromise its financial position nor disadvantage its customers. The firm must ensure that, regardless of where the funds are received, it is always in compliance with the safeguarding of funds requirements.

  Guidance – Safeguarding Requirements In accordance with Section 20 of the Regulations, every E-money Institution must satisfy the GFSC that it has adequate arrangements in place to safeguard the funds of customers that have been received in exchange for E-money that has been issued and prevent the use of these funds for the E-money Institution’s own account. An E-money Institution shall safeguard customer funds by:

• Ensuring such funds are segregated and are not, at any time, joined with the funds of any other person or firm; or
• Ensuring such funds are covered by an insurance policy or similar guarantee which does not belong to the same group as the E-money Institution itself for an amount equivalent to that which would have been segregated in the absence of the insurance policy or such. This should be payable in the event that the E-money Institution is unable to meet its financial obligations.

Additionally, an E-money Institution that holds customer funds must keep such records and accounts as are necessary to enable them at any time and without delay to distinguish funds held for one customer from another and from the funds of the E-money Institution.   Capital Requirements An authorized E-money Institution is required to hold an initial and ongoing capital of:

• €350,000; or
• 2%* of the average outstanding electronic money (as projected at application), whichever the highest.

A small or registered E-money Institution is required to hold an initial and ongoing capital of 2.2%* of the average outstanding electronic money. Firms holding multiple licenses may be required to hold the aggregate of the capital required for each license prior to being permitted to conduct the proposed activity, and on an ongoing basis. The level of capital in these cases will be considered by the GFSC. It is advised that you discuss this with the GFSC ahead of your application.   Why Valsen

• We will advise you on the optimal legal structure for your requirements, size, expectations and circumstances. We have extensive knowledge of a wide range of legal structures in all major jurisdictions.
• Valsen will assist to complete every form for each process in the best way we know how (Based on our many years’ experience with various regulators and service providers across the world)
• We are very hands-on in the post-filing period checking with the regulator and service providers and updating you regularly. Any queries raised by the regulators and service providers during processing will be quickly synthesized by us and we shall craft the right responses to move the process forward fast.
• We can provide you with fit and proper directors in case you need. We have a wide network of qualified and experienced lawyers, chartered accountants, chartered financial analysts, wealth managers, FX experts, Investment advisors etc. of international pedigree.
• We have a full in-house compliance support for all compliance requirements with the regulator and service providers