Electronic money instiutions

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Electronic money institutions

An electronic money institution is a commercial company that has a licence granted by the Financial and Capital Market Commission (hereinafter – the Commission) to issue electronic money or a legal person that does not need a licence to issue electronic money and that is registered in the register of institutions maintained by the Commission .

I. An electronic money institution does not need a licence issued by the Commission, and it is entitled to commence its activity in Latvia after registration with the register of institutions maintained by the Commission provided that it complies with Article 5.1 of the Law on Payment Services and Electronic Money (hereinafter the Law), namely:

1) the average outstanding electronic money within the commercial activity of the electronic money institution does not exceed two million euro. An electronic money institution that has not performed commercial activity for full six calendar months shall determine the average outstanding electronic money on the basis of the commercial activity plan unless the Commission has requested the electronic money institution to amend the plan;

2) the restrictions set out in Paragraph 1 of Article 21 of the Law do not apply to any of the persons referred to in Subparagraph 10 of Paragraph 1 of Article 11 of the Law and they comply with the requirements of Article 20 of the Law.

To commence its activity, an electronic money institution shall submit to the Commission an application to this effect (filled-in Annex 4 to the Financial and Capital Market Commission's Regulations No 64 of 15.04.2011; Regulations on Granting Payment Institution and Electronic Money Institution Operating Licences, Registration of Payment Institution and Electronic Money Institution, Documentation and Reporting ) and documentation and information referred to in Paragraph 2 of Article 5.1 of the Law and the Commission's regulatory provisions.

For an electronic money institution, whose activity does not need a licence, the territory of Latvia shall be the place for carrying out its commercial activity .

Within 30 days after the receipt of all the information and documents referred to in the Law the Commission shall assess whether the person that intends to commence operation of electronic money institution complies with the requirements of the Law. Where the person complies with these requirements, it shall be registered with the register of institutions maintained by the Commission.

II. Where an electronic money institution does not comply with the provisions set in Article 5.1 of the Law, it is required to obtain the licence for the operation of electronic money institution by submitting to the Commission an application to this effect (filled-in Annex 1 to the Financial and Capital Market Commission's Regulations No 64 of 15.04.2011; Regulations on Granting Payment Institution and Electronic Money Institution Operating Licences, Registration of Payment Institution and Electronic Money Institution, Documentation and Reporting ) , and documentation and information referred to in Article 11 of the Law and the Commission's regulatory provisions .

A licensed electronic money institution shall ensure that on the day when the decision to grant a licence for the operation of an electronic money institution is taken its initial capital is at least 350 000 euro.

The Commission shall take a decision on granting or refusing to grant a licence and notify the applicant within three months after receiving all necessary documents; where it refuses to grant the licence, it shall specify the reason for refusal. The Commission grants the licence for the operation of an electronic money institution for an indefinite period .

At the same time, for the purpose of prevention of such outstanding electronic money in Latvia that is not issued in compliance with laws and regulations, namely, it has been issued by the subject who in accordance with provisions of Directive 2009/110/EC and the Law is not authorized to issue electronic money, the Commission points out that activities of those commercial companies that deal with distribution of electronic money issued by foreign issuers in the Republic of Latvia (except the activities of representatives of electronic money institutions licensed in a EU Member State and operating on a cross-border basis in Latvia under the freedom to provide services) shall be deemed as the issue of electronic money, and such commercial companies shall be registered with the register of electronic money institutions in accordance with the provisions of Article 5.1 of the Law or shall obtain a licence to issue electronic money pursuant to Article 11 of the Law .

Regulations and laws regulating the activities of electronic money institutions are available at: http://www.fktk.lv/en/law/electronic_money_institutions/laws/2014-06-04_law_on_payment_services_and_electronic_money/

Provision of advice to potential market participants 

FCMC experts provide advice on the issues related to licensing of e-money and payment institutions, as well as registration procedures and assessment of business activities of potential market participants.

To arrange advisory service appointment or telephone consultation you can e-mail us on fktk@fktk.lv