Electronic Money Institution (EMI)
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Electronic Money Institutions in Malta – Permitted Activities
An Electronic Money Institution (“EMI”) is defined as “a financial institution that has been licensed in accordance with the Malta Financial Institutions Act (“Act”) and authorised to issue electronic money or that holds an equivalent authorisation in another country in terms of the Electronic Money Directive to issue electronic money”.
In addition to issuing electronic money, EMIs are entitled, subject to the prior authorisation of the MFSA, to engage in any of the following activities:
- the provision of certain payment services;
- the granting of credit related to certain payment services. Provided that any such credit shall not be granted from the funds received in exchange of electronic money and held in accordance with the prescribed safeguarding requirements;
- the provision of operational services and closely related ancillary services in respect of the issuing of electronic money or to the provision of payment services such as ensuring execution of payment transactions, foreign exchange services strictly in relation to payment services, safekeeping activities, and storage and processing of data;
- the operation of payment systems;
- business activities other than the issuance of electronic money, having regard to the applicable law regulating such activities.
Minimum Initial Capital
In terms of the Act, EMIs are expected to satisfy a minimum initial capital requirement of €350,000. This enables EMIs to enter into the market more affluently when compared to the previous restrictive regime which required an initial capital of €1,000,000.
Main Features of Electronic Money Institutions in Malta
- The minimum initial capital requirement is €350,000. The licensed EMI is obliged to ensure that its own funds do not fall below this amount of initial capital.
- It is necessary to have at least two individuals who will effectively direct the business of the EMI in Malta. Such persons must be of a sufficiently good repute and must have sufficient experience to perform such duties.
- Members of the Board of directors, senior managers and shareholders of the applicant are subject to a rigorous due diligence exercise whereby their fitness and properness will be assessed during the application stage.
- EMIs based in Malta are allowed to outsource services subject to the MFSA’s evaluation on their own merits.
Passporting of Licence
Once the relative Malta EMI license is obtained, the EMI would benefit from the right to passport such Electronic Money Institution license into other EU Member State country/ies by following some basic procedures of notification thereby enabling the EMI to provide its services within the relevant Member State/s and/or EEA State/s either through the establishment of a branch or remotely, under the freedom to provide services.
How much does an EMI Licence cost?
An Electronic Money Institution Licence can be obtained by submitting to the MFSA a one-time fee of €3,500 towards the application and its processing.
An annual supervision fee dependent on a case-by-case scenario of no less than €2,500 will also be required.
The above figures are relative only to the fixed minimum fees. That being said, the annual supervision fee may differ from case to case depending on certain criteria.
To find out more about the process of acquiring an EMI Licence, please reach out to Dr Franklin Cachia at [email protected] and he will gladly assist you further.
How can CSB Group help you?
Malta’s comprehensive legal and regulatory framework has attracted a large number of financial services operators to its shores. CSB Group’s specialised and experienced team of professionals offers bespoke advisory and support to reputable operators in the financial services industry, assisting with legal, licensing and regulatory requirements in order to establish operations in Malta. These range from Funds/Collective Investment Schemes to Investment Services in Malta, covering Insurance Distributors and Banking and Financial Institutions.
For more information, email [email protected] and start your journey with a tailor-made solution today.
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