EMI and AEMI Licenses in the United Kingdom

Electronic money (e-money) institution (or EMI) is a licensed financial institution which engages in e-money related and payment services (as would be described in details in this article).

The full license for e-money is not restricted to either time or area of activities. Therefore, a holder of the e-money institution license in United Kingdom is allowed to provide any form of service in the European Economic Area (EEA) without having to undergo a licensing procedure in any other member state. After the license in United Kingdom is obtained, the e-money institution can provide services in other EEA member states by either establishing branches or by means of pass porting (license to provide services with further authorization by any other European state).

There is also the option of applying for a limited license for an e-money institution. The limited license holder (owner) would be able to provide services in the territory of United Kingdom; but certain restrictions will be applicable in relation to the turnover of the company. 

In the UK, it is legally possible to register an English company and obtain a financial license from the FCA regulatory body, which allows you to set up an electronic money institution in less than 12 months (legal maximum term) around the world, open IBAN accounts, get SWIFT, SEPA memberships and issue payment cards.

Advantages of EMI License in the United Kingdom

This financial structure provides solutions to current world economic situations for large transactional business - banking services and international transfers (especially in USD currency). Certain distinguishing features of this financial structure includes: 

  • Obtaining an English SWIFT account;
  • Issuance of English IBAN accounts to clients of the institution;
  • Remote (via the Internet) account openings, both to individuals and legal entities;
  • Issuance of Master Cards linked to the customer's account;
  • Authorized payments to banks around the world in USD/EUR/GBP and other currencies;
  • Ability to accept payments from any international account in the SWIFT system;
  • Independent decision-making on payments and account opening;
  • Possibility of opening correspondent accounts around the world;
  • Applying the AML rules to your business activity.

H2: Allowed Activities with AEMI license in UK (Great Britain)

1. Services enabling cash to be deposited into a payment account and the operations required for operating a payment account.
2. Services enabling cash withdrawals from a payment account as well as all the operations required for operating a payment account.
3. Completion of payment transactions, including transfers of funds from a payment account with the user’s payment service provider or with another payment service provider: 

  • Completion of direct debits, including one-off direct debits; 
  • Completion of payment transactions through a payment card or a similar device; 
  • Completion of credit transfers, including standing orders.

4.Completion of payment transactions where the funds are covered by a credit line for a payment service user: 

  • Completion of direct debits, including one-off direct debits; 
  • Completion of payment transactions through a payment card or a similar device; 
  • Completion of credit transfers, including standing orders.

5. Issuing of payment instruments and/or acquiring of payment transactions.
6. Money remittance.
7. Payment initiation services.
8. Account information services.
9. Issuing e-money, provision of operational services and closely related ancillary services or the provision of payment services.
10. Operation of payment systems.
11. Business activities other than issuance of electronic money, having regard to the applicable Community and national law, etc.

 Licensing of electronic money institution in United Kingdom: Requirements 

Licensing process involves a lot of requirements for approval, despite the fact, the process is straightforward in United Kingdom with regards to EMI activities. At the initial stage, the future owner of the EMI license should:

  1. Be at least 18 years old;
  2. The authorized capital should always be in the company's accounts and should not decline, it should always be available.
  3. Owning a bank account for individual or corporate purposes;
  4. To have available documents confirming income (tax declaration or certificate from tax control authorities);
  5. Do not have restrictions or prohibitions from the regulatory authorities of the EU and Great Britain;
  6. Acquisition (or long-term lease) of real estate (building or office) for the company.

Other tasks relating to the licensing of e-money institution which may require additional time include: 

  • Preparation of business model and business plan; 
  • The management positions (certain qualification and experience requirements are applicable); 
  • Preparing description of IT system (and other planned technical solutions); 
  • Preparing the accountancy system description; 
  • Contracting third parties (e.g. auditing company).

H2: Documents for licensing of electronic money in United Kingdom

Main list of documents to be submitted alongside the application includes:

  1. Articles of association;
  2. A program of operations;
  3. A business plan, including a forecast budget for the first three financial years which demonstrates that the electronic money institution is able to operate soundly and employs the appropriate internal control systems, procedures and resources;
  4. The evidence that the minimum size of the equity capital does not fall below the required amount;
  5. A description of the measures taken for safeguarding electronic money holders’ funds, and where payment services not relating to issuance of electronic money are to be provided, also a description of the measures taken (to be taken) for safeguarding payment service users’ funds;
  6. A description of the management roles and internal control mechanisms applied, including administrative, risk management and accounting procedures;
  7. A description of the internal control mechanisms established in order to comply with obligations in relation to prevention of money laundering and terrorist financing;
  8. A description of the structural organization, including the intended use of branches, agents, natural or legal persons through which the electronic money institution intends to distribute or redeem electronic money or other entities to which activities will be outsourced, and a description of participation in payment systems;
  9. The data on the identity of persons with holdings in the authorized capital and/or voting rights of the electronic money institution, the size of their holdings in the authorized capital and/or voting rights, evidence of the suitability of these persons taking into account the need to ensure the sound and prudent management of an electronic money institution;
  10. The identity of directors, including the people responsible for the management of the electronic money issuance activities of the electronic money institution as well as evidence that they are of good repute and meet the requirements set forth by the legislation;
  11. Data of an audit firm which performs audit or a certified auditor independently performing audits;
  12. The address of the registered office.

Certain other documents, e.g. lease agreement of the premises, are presented to the Financial Conduct Authority (FCA) when applying for a license. It is important to know that the Directive 2015/2366 on payment services in the internal market (PSD2) (also applicable for e-money institutions) establishes additional requirements in relation to the documents and contents thereof. The requirements prescribed by PSD2 are yet to be approved by FCA legislation (it will be passed into national legislation is 13th January 2018), nonetheless, the supervisory authority requires the documents submitted to be in compliance with the PSD2 and relevant guidelines.

obtain an AEMI license in uk

Process of obtaining a license for electronic money in United Kingdom (Great Britain)

The signed papers will be considered by the Financial Conduct Authority (FCA) for no more than 4-6 months from the filing date. The decision to issue a license for AEMI/SEMI will be made after consideration of the above documents within the same period.

In a case where there are any irregularities in the documents, regarding the form of the document or the content, the controlling authority will request for the missing information, or corrected form according to regulatory requirements. In this case, consideration period (2-3 months) starts from the date, the last document was filed.

The process of licensing is taking the following activity into three stages. 

STAGE I

Signing and collecting the necessary documents

Step №1. Agreement signing for AEMI license and NDA
Step №2. Information collection and conduct of KYC on beneficiary and directors:

  • Certificate of incorporation
  • Power of attorney
  • Shareholder register
  • Articles of association
  • Details of Beneficial Owner(s)
  • Technical documentation about the e-wallet 
  • Declaration of company’s income over the past few years
  • UBO income statement for the last few years
  • Information about directors
  • CV
  • AML certificates
  • Current company wallet account procedures

Step №3. Legal entity set-up (with Legal address registration, local phone number registration, rental of real estate for the directors and registration of local phone numbers for the directors)
Step №4. Filling out preliminary forms:

  • Regulatory Business Plan
  • Organization structure chart
  • IT control forms
  • Financial forecast forms

STAGE II

Registration of financial and reporting documentation

Step № 1. Application for VAT number & bank account opening
Step № 2. Signing an agreement with an accounting firm
Step №3. Gap analysis and planning (it indicates the Company and its documents deep analysis)
Step №4. Legal entity set-up with bank account opening and application preparation. It includes also:

  • Regulatory business plan review and sign off;
  • Risk management workshop;
  • Risk management and controls framework design and documentation;
  • Risk controls framework sign off meeting;

Step №5. EMI / AEMI application pack completion and signing-off meeting

STAGE III

Applying for and obtaining an AEMI license
Step №1. Registration of the application for the license
Step №2. Liaison and Decision of results from the FCA

Cost of License EMI and AEMI in United Kingdom

The cost of AEMI license is about 50 000 Euro and more (depends on the type of license, license time and other supplied services).

Why Obtain License with Law&Trust International?

Law and Trust International proposes obtaining the necessary EMI license in United Kingdom according to the requirements and laws. We provide a high specter of opportunities for very interested person. Law and Trust gives:

  1. A well-qualified law assistance;
  2. Submitting the documents, liaising with the Financial Conduct Authority (FCA) and Bank of England;
  3. Filling the required papers and applications;
  4. Legal support and representation of your interests in the HM Treasury, Bank of England, FCA when drafting agreements with third parties (audit companies, service providers)
  5. Registration of companies, TMs, services and intellectual property;
  6. Opening bank accounts and VAT numbers in the UK;
  7. Creating a legal opinion for the payment system, working with cryptocurrencies, banking systems.

After the process of obtaining the license, we would deliver it personally or by courier services. If you are ready to get your AEMI license in the United Kingdom, please contact our lawyers for free consultation. 

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