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Electronic Money Law of 2012
15.06.2012
业务领域: 银行和抵押融资业务, 欧盟法业务

The “Electronic Money Law of 2012” transposes into Cyprus legislation the EU “Directive 2009/110 on the taking up, pursuit and prudential supervision of the business of Electronic Money Institutions”. The said law shall repeal and replace the basic law [Electronic Money Institutions Law - Law 86(I) of 2004].

The Law revises the legal framework for services regarding pre-paid electronic payment products, by regulating the following issues: (a) the issuance of electronic money in the Republic of Cyprus, (b) the issuance of electronic money in another EU member state or in a third country by a natural person residing in the Republic or by a legal person incorporated in the Republic, (c) the licensing and the prudential supervision of electronic money institutions.

The Law does not apply to:
• monetary value stored on specific pre-paid instruments, designed to address precise needs that can be used only in a limited way, because they allow the electronic money holder to purchase goods or services only in the premises of the electronic money issuer or within a limited network of service providers under direct commercial agreement with a professional issuer, or because they can be used only to acquire a limited range of goods or services.
• monetary value used as a payment through a telecommunication or digital device, under the condition that: (i) the goods or services in question can be used only through a digital device, (ii) the telecommunication, digital or information technology operator does not only act as an intermediary between the payment service user and the supplier of the goods or services.

Pursuant to the Law, the Central Bank of Cyprus and the Authority for the Supervision and Development of Co-operative Societies are designated as the two competent authorities for granting authorisation for taking up business of an electronic money institution. The said authorities are also responsible for the prudential supervision of such business.

Conditions for granting of authorisation:
Under the Law, an application for authorisation as an electronic money institution shall be submitted to the relevant competent authority and shall be accompanied by any information, document or evidence prescribed in a Directive to be issued by the competent authority under the Law.

The competent authority shall grant an authorisation if the information and evidence accompanying the application complies with all the requirements. Before granting an authorisation, the authority may consult other relevant public authorities.

The authority shall grant an authorisation only if, taking into account the need to ensure the sound and prudent management of an electronic money institution, the electronic money institution has robust governance arrangements, including:
• a clear organisational structure with well-defined, transparent and consistent lines of responsibility;
• effective procedures to identify, manage, monitor and report the risks to which it is or might be exposed, and
• adequate internal control mechanisms, including sound administrative and accounting procedures.

According to the law, the arrangements, procedures and mechanisms shall be comprehensive and proportionate to the nature, scale and complexity of the services provided by an electronic money institution.

Furthermore, where an electronic money institution issues electronic money and is also engaged in other business activities, the competent authority may require the electronic money institution to establish a separate entity for the issuance of electronic money if the other business activities of the institution impair or are likely to impair, either the financial soundness of the institution or the ability of the authority to monitor the institution’s compliance with its obligations under the Law/Directives.

The competent authority shall refuse to grant an authorisation if, taking into account the need to ensure the sound and prudent management of an electronic money institution, it is not satisfied as to the suitability of any shareholder or member that has a qualifying holding. In addition to this, where close links exist between an electronic money institution and another person, the authority shall grant an authorisation only if those links do not prevent the effective exercise of its supervisory functions.

Within 3 months of the receipt of an application, the competent authority shall inform the applicant concerned whether the authorisation has been granted or refused. The authority shall also give reasons if it refuses to grant an authorisation.

Initial Capital – Own funds
The competent authority shall not authorise an applicant as an electronic money institution unless the applicant holds initial capital of at least €350,000. The authority shall issue Directives to determine the composition of own funds. Electronic money institutions are required to hold, at all times, own funds as determined in a Directive issued by the competent authority.

Safeguarding requirements: Electronic money institutions are required to safeguard funds that have been received in exchange for electronic money that has been issued.

Audit provisions:
For supervisory purposes, an electronic money institution shall provide separate accounting information for activities other than the issuance of electronic money and payment services, and shall provide an auditor’s report in relation to all such accounting information.

The Authority shall also keep a register of all the electronic money institutions.

Other activities of electronic money institutions:
In addition to the issuing of electronic money, electronic money institutions may be entitled to engage in any of the following activities:
• the provision of payment services covered by the authorisation granted;
• the granting of credit related to payment services under the Payment Services Law;
• the operation of payment systems on the condition that the institutions comply with a Directive issued by virtue of Section 5 of the Payment Services Law and without prejudice of the provisions of any other relevant law;
• business activities other than issuance of electronic money subject to Cyprus law.

An authorisation becomes invalid if an institution:
• does not make use of the authorisation within 12 months;
• expressly renounces the authorisation;
• does not engage in the business of the issuance of electronic money or does not provide payment services for more than six months.

The authority may withdraw an authorisation issued to an electronic institution if an institution:
• obtained the authorisation through false statements or any other irregular means;
• fails to comply with the requirements imposed under the Law;
• would constitute a threat to the stability of the payment system by continuing its electronic money or payment services business.

Liability:
Under the law, an electronic money institution shall be fully liable for any acts or omissions of its employees or any distributor, agent, branch or entity to which activities are outsourced.

Exercise of the right of establishment and the freedom to provide services:
Any authorised institution wishing to issue electronic money or provide payment services in another EU member state, in exercise of the right of establishment or the freedom to provide services, shall so inform the competent authorities in Cyprus.

Issuance and redeemability of electronic money:
According to the provisions of Part IV of the law, an electronic money issuer shall issue electronic money at par value on the receipt of funds. Furthermore, upon request by the electronic money holder, electronic money issuers redeem at any moment and at par value, the monetary value of the electronic money held. The contract between the electronic money issuer and the electronic money holder shall clearly and prominently state the conditions of redemption, including any fees relating thereto, and the electronic money holder shall be informed of those conditions before being bound by any contract or offer.

Out-of-court complaint and redress procedures for the settlement of disputes:
The law also contains provisions that allow electronic money holders and other interested parties, including consumer associations, to submit complaints to the competent authorities with regard to payment service providers' alleged infringements of the provisions of Part IV of the law.
The competent authorities shall inform the complainant of the existence of the out-of-court complaint and redress procedures set up in accordance with the law. The relevant competent authority may also issue a Directive by virtue of the provisions of the law, regulating further procedural issues with regard to complaint procedures.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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