Directive 2009/110/EC on the taking up, pursuit and prudential supervision of the business of electronic money institutions which came into force on 30th October 2009, provides a flexible regime for electronic money institutions. It aims to enable the creation of new, innovative and secure electronic money services, provide market access to new companies and foster real and effective competition between market participants.
The Directive is expected to be transposed into Maltese law by no later than the 30th April 2011 by means of amendments to the Financial Institutions Act as well as the issue of a new Financial Institutions Rule.
Under the proposed Rule, electronic money institutions are required to hold at the time of authorization an initial capital to the tune of EUR 350,000.
With regards to small e-money issuers, the MFSA may hold the provisions relating to general prudential requirements, initial capital, own funds and safeguarding requirements, inapplicable to companies whose total business activities do not generate an average outstanding electronic money that exceeds one million euro. This on condition that the maximum storage amount on the payment instrument does not exceed two hundred fifty euro.
The proposed Rule also deals with the initial capital requirements for small e-money issuers. The MFSA proposes the establishment of an initial capital figure to be held by small electronic money issuers, however, to date the initial capital figure has not yet been established by the MFSA. The MFSA has invited comments on this aspect during the consultation period with a view of establishing an appropriate initial capital figure.
The proposed Financial Institutions Rule is not binding as yet and is subject to changes and revisions following the representations received during the consultation procedure. The relevant Bill with the proposed amendments to the Financial Institutions Act is expected to be published shortly in the Government Gazette.
