The pursuit and prudential supervision of the business of electronic money institutions
This Directive aims to allow non-bank institutions to issue electronic money while preserving their financial integrity and operating on a level-playing field with other credit institutions.
Directive 2000/46/EC of the European Parliament and of the Council of 18 September 2000 on the taking-up, pursuit of and prudential supervision of the business of electronic money institutions.
The Directive authorises non-bank institutions to issue electronic money provided that it is on a non-professional basis.
It defines this new mode of payment neutrally as a surrogate for coins and banknotes which is stored on an electronic device (chip card or computer memory) and intended for making payments of limited amounts.
The Directive regulates free movement within this sub-sector of financial services by applying to it the basic rules on credit institutions.
Electronic money institutions may be granted the "European passport" (single licence) if they comply with the principles laid down in the First Banking Directive as regards mutual recognition of the licence and prudential supervision and with the principle of home Member State supervision (Directive 2000/12/EC).
Like banks, they must preserve bearer confidence by redeeming electronic money at par value in coins and bank notes or by transfer (without charge).
To ensure consistency in terms of the prevention of organised crime, electronic money institutions must also comply with the objectives of the Directive on prevention of the use of the financial system for the purpose of money laundering (Directive 91/308 and Directive 2000/12/EC).
Lastly, like credit institutions, institutions issuing electronic money must have a sound administrative and accounting system and internal control mechanisms.
However, the obligations on electronic money institutions are not as heavy as those imposed on banks. For example, they are not required to comply with the rules on deposit-taking if the funds received are immediately exchanged for electronic money.
Likewise, they are not required to comply with the legislation on bank guarantees, since the funds received are not considered to constitute "deposits" (Directive 94/19/EC and Directive 2000/12/EC).
The Directive also introduces a prudential supervisory system for electronic money institutions that is separate from that applicable to banks, despite being modelled on it (Directive 2000/12/EC), in that it is more specific and less complex. For example, initial capital requirements are less stringent (EUR 1 million instead of the EUR 5 million required of banks), as are own funds requirements (2% of financial liabilities related to outstanding electronic money).
However, this simplification of financial supervision is offset by the fact that electronic money institutions are subject to tighter restrictions than credit institutions as regards the scope of their activities and investment.
Lastly, in order to ensure a certain degree of flexibility, the competent authorities may waive the application of some or all of the provisions of the Directive to electronic money institutions whose activities are limited or local.
Not later than 27 April 2005 the Commission must present a report to the European Parliament and the Council on the application of the Directive.
Entry into force
Deadline for transposition in the Member States
OJ L 275 of 27.10.2000