Directive 2000/46/EC of the European Parliament and of
of 18 September 2000 on the taking up, pursuit of and prudential supervision of
the business of electronic money institutions
THE EUROPEAN PARLIAMENT AND THE COUNCIL OF THE EUROPEAN UNION,
Having regard to the Treaty establishing the European Community, and in
particular the first and third sentences of Article 47(2) thereof,
Having regard to the proposal from the Commission(1),
Having regard to the opinion of the Economic and Social Committee(2),
Having regard to the opinion of the European Central Bank(3),
Acting in accordance with the procedure laid down in Article 251 of the
(1) Credit institutions within the meaning of Article 1, point 1, first
subparagraph (b) of Directive 2000/12/EC(5) are limited in the scope of their
(2) It is necessary to take account of the specific characteristics of these
institutions and to provide the appropriate measures necessary to coordinate and
harmonise Member States' laws, regulations and administrative provisions
relating to the taking up, pursuit and prudential supervision of the business of
electronic money institutions.
(3) For the purposes of this Directive, electronic money can be considered an
electronic surrogate for coins and banknotes, which is stored on an electronic
device such as a chip card or computer memory and which is generally intended
for the purpose of effecting electronic payments of limited amounts.
(4) The approach adopted is appropriate to achieve only the essential
harmonisation necessary and sufficient to secure the mutual recognition of
authorisation and prudential supervision of electronic money institutions,
making possible the granting of a single licence recognised throughout the
Community and designed to ensure bearer confidence and the application of the
principle of home Member State prudential supervision.
(5) Within the wider context of the rapidly evolving electronic commerce it is
desirable to provide a regulatory framework that assists electronic money in
delivering its full potential benefits and that avoids hampering technological
innovation in particular. Therefore, this Directive introduces a
technology-neutral legal framework that harmonises the prudential supervision of
electronic money institutions to the extent necessary for ensuring their sound
and prudent operation and their financial integrity in particular.
(6) Credit institutions, by virtue of point 5 of Annex I to Directive
2000/12/EC, are already allowed to issue and administer means of payment
including electronic money and to carry on such activities Community-wide
subject to mutual recognition and to the comprehensive prudential supervisory
system applying to them in accordance with the European banking Directives.
(7) The introduction of a separate prudential supervisory regime for electronic
money institutions, which, although calibrated on the prudential supervisory
regime applying to other credit institutions and Directive 2000/12/EC except
Title V, Chapters 2 and 3 thereof in particular, differs from that regime, is
justified and desirable because the issuance of electronic money does not
constitute in itself, in view of its specific character as an electronic
surrogate for coins and banknotes, a deposit-taking activity pursuant to Article
3 of Directive 2000/12/EC, if the received funds are immediately exchanged for
(8) The receipt of funds from the public in exchange for electronic money, which
results in a credit balance left on account with the issuing institution,
constitutes the receipt of deposits or other repayable funds for the purpose of
(9) It is necessary for electronic money to be redeemable to ensure bearer
confidence. Redeemability does not imply, in itself, that the funds received in
exchange for electronic money shall be regarded as deposits or other repayable
funds for the purpose of Directive 2000/12/EC.
(10) Redeemability should always be understood to be at par value.
(11) In order to respond to the specific risks associated with the issuance of
electronic money this prudential supervisory regime must be more targeted and,
accordingly, less cumbersome than the prudential supervisory regime applying to
credit institutions, notably as regards reduced initial capital requirements and
the non-application of Directive 93/6/EEC(6) and Title V, Chapter 2, Sections II
and III of Directive 2000/12/EC.
(12) However, it is necessary to preserve a level playing field between
electronic money institutions and other credit institutions issuing electronic
money and, thus, to ensure fair competition among a wider range of institutions
to the benefit of bearers. This is achieved since the abovementioned less
cumbersome features of the prudential supervisory regime applying to electronic
money institutions are balanced by provisions that are more stringent than those
applying to other credit institutions, notably as regards restrictions on the
business activities which electronic money institutions may carry on and,
particularly, prudent limitations of their investments aimed at ensuring that
their financial liabilities related to outstanding electronic money are backed
at all times by sufficiently liquid low risk assets.
(13) Pending the harmonisation of prudential supervision of outsourced
activities for credit institutions it is appropriate that electronic money
institutions have sound and prudent management and control procedures. With a
view to the possibility of operational and other ancilliary functions related to
the issuance of electronic money being performed by undertakings which are not
subject to prudential supervision it is essential that electronic money
institutions have in place internal structures which should respond to the
financial and non-financial risks to which they are exposed.
(14) The issuance of electronic money may affect the stability of the financial
system and the smooth operation of payments systems. Close cooperation in
assessing the integrity of electronic money schemes is called for.
(15) It is appropriate to afford competent authorities the possibility of
waiving some or all of the requirements imposed by this Directive for electronic
money institutions which operate only within the territories of the respective
(16) Adoption of this Directive constitutes the most appropriate means of
achieving the desired objectives. This Directive is limited to the minimum
necessary to achieve these objectives and does not go beyond what is necessary
for this purpose.
(17) Provision should be made for the review of this Directive in the light of
experience of developments in the market and the protection of bearers of
(18) The Banking Advisory Committee has been consulted on the adoption of this
HAVE ADOPTED THIS DIRECTIVE:
Scope, definitions and restriction of activities
1. This Directive shall apply to electronic money institutions.
2. It shall not apply to the institutions referred to in Article 2(3) of
3. For the purposes of this Directive:
(a) "electronic money institution" shall mean an undertaking or any
other legal person, other than a credit institution as defined in Article 1,
point 1, first subparagraph (a) of Directive 2000/12/EC which issues means of
payment in the form of electronic money;
(b) "electronic money" shall mean monetary value as represented by a
claim on the issuer which is:
(i) stored on an electronic device;
(ii) issued on receipt of funds of an amount not less in value than the monetary
(iii) accepted as means of payment by undertakings other than the issuer.
4. Member States shall prohibit persons or undertakings that are not credit
institutions, as defined in Article 1, point 1, first subparagraph of Directive
2000/12/EC, from carrying on the business of issuing electronic money.
5. The business activities of electronic money institutions other than the
issuing of electronic money shall be restricted to:
(a) the provision of closely related financial and non-financial services such
as the administering of electronic money by the performance of operational and
other ancillary functions related to its issuance, and the issuing and
administering of other means of payment but excluding the granting of any form
of credit; and
(b) the storing of data on the electronic device on behalf of other undertakings
or public institutions.
Electronic money institutions shall not have any holdings in other undertakings
except where these undertakings perform operational or other ancillary functions
related to electronic money issued or distributed by the institution concerned.
Application of Banking Directives
1. Save where otherwise expressly provided for, only references to credit
institutions in Directive 91/308/EEC(7) and Directive 2000/12/EC except Title V,
Chapter 2 thereof shall apply to electronic money institutions.
2. Articles 5, 11, 13, 19, 20(7), 51 and 59 of Directive 2000/12/EC shall not
apply. The mutual recognition arrangements provided for in Directive 2000/12/EC
shall not apply to electronic money institutions' business activities other than
the issuance of electronic money.
3. The receipt of funds within the meaning of Article 1(3)(b)(ii) does not
constitute a deposit or other repayable funds according to Article 3 of
Directive 2000/12/EC, if the funds received are immediately exchanged for
1. A bearer of electronic money may, during the period of validity, ask the
issuer to redeem it at par value in coins and bank notes or by a transfer to an
account free of charges other than those strictly necessary to carry out that
2. The contract between the issuer and the bearer shall clearly state the
conditions of redemption.
3. The contract may stipulate a minimum threshold for redemption. The threshold
may not exceed EUR 10.
Initial capital and ongoing own funds requirements
1. Electronic money institutions shall have an initial capital, as defined in
Article 34(2), subparagraphs (1) and (2) of Directive 2000/12/EC, of not less
than EUR 1 million. Notwithstanding paragraphs 2 and 3, their own funds, as
defined in Directive 2000/12/EC, shall not fall below that amount.
2. Electronic money institutions shall have at all times own funds which are
equal to or above 2 % of the higher of the current amount or the average of the
preceding six months' total amount of their financial liabilities related to
outstanding electronic money.
3. Where an electronic money institution has not completed a six months' period
of business, including the day it starts up, it shall have own funds which are
equal to or above 2 % of the higher of the current amount or the six months'
target total amount of its financial liabilities related to outstanding
electronic money. The six months' target total amount of the institution's
financial liabilities related to outstanding electronic money shall be evidenced
by its business plan subject to any adjustment to that plan having been required
by the competent authorities.
Limitations of investments
1. Electronic money institutions shall have investments of an amount of no less
than their financial liabilities related to outstanding electronic money in the
following assets only:
(a) asset items which according to Article 43(1)(a) (1), (2), (3) and (4) and
Article 44(1) of Directive 2000/12/EC attract a zero credit risk weighting and
which are sufficiently liquid;
(b) sight deposits held with Zone A credit institutions as defined in Directive
(c) debt instruments which are:
(i) sufficiently liquid;
(ii) not covered by paragraph 1(a);
(iii) recognised by competent authorities as qualifying items within the meaning
of Article 2(12) of Directive 93/6/EEC; and
(iv) issued by undertakings other than undertakings which have a qualifying
holding, as defined in Article 1 of Directive 2000/12/EC, in the electronic
money institution concerned or which must be included in those undertakings'
2. Investments referred to in paragraph 1(b) and (c) may not exceed 20 times the
own funds of the electronic money institution concerned and shall be subject to
limitations which are at least as stringent as those applying to credit
institutions in accordance with Title V, Chapter 2, Section III of Directive
3. For the purpose of hedging market risks arising from the issuance of
electronic money and from the investments referred to in paragraph 1, electronic
money institutions may use sufficiently liquid interest-rate and
foreign-exchange-related off balance-sheet items in the form of exchange-traded
(i.e. not OTC) derivative instruments where they are subject to daily margin
requirements or foreign exchange contracts with an original maturity of 14
calendar days or less. The use of derivative instruments according to the first
sentence is permissible only if the full elimination of market risks is intended
and, to the extent possible, achieved.
4. Member States shall impose appropriate limitations on the market risks
electronic money institutions may incur from the investments referred to in
5. For the purpose of applying paragraph 1, assets shall be valued at the lower
of cost or market value.
6. If the value of the assets referred to in paragraph 1 falls below the amount
of financial liabilities related to outstanding electronic money, the competent
authorities shall ensure that the electronic money institution in question takes
appropriate measures to remedy that situation promptly. To this end, and for a
temporary period only, the competent authorities may allow the institution's
financial liabilities related to outstanding electronic money to be backed by
assets other than those referred to in paragraph 1 up to an amount not exceeding
the lower of 5 % of these liabilities or the institution's total amount of own
Verification of specific requirements by the competent authorities
The competent authorities shall ensure that the calculations justifying
compliance with Articles 4 and 5 are made, not less than twice each year, either
by electronic money institutions themselves, which shall communicate them, and
any component data required, to the competent authorities, or by competent
authorities, using data supplied by the electronic money institutions.
Sound and prudent operation
Electronic money institutions shall have sound and prudent management,
administrative and accounting procedures and adequate internal control
mechanisms. These should respond to the financial and non-financial risks to
which the institution is exposed including technical and procedural risks as
well as risks connected to its cooperation with any undertaking performing
operational or other ancillary functions related to its business activities.
1. Member States may allow their competent authorities to waive the application
of some or all of the provisions of this Directive and the application of
Directive 2000/12/EC to electronic money institutions in cases where either:
(a) the total business activities of the type referred to in Article 1(3)(a) of
this Directive of the institution generate a total amount of financial
liabilities related to outstanding electronic money that normally does not
exceed EUR 5 million and never exceeds EUR 6 million; or
(b) the electronic money issued by the institution is accepted as a means of
payment only by any subsidiaries of the institution which perform operational or
other ancillary functions related to electronic money issued or distributed by
the institution, any parent undertaking of the institution or any other
subsidiaries of that parent undertaking; or
(c) electronic money issued by the institution is accepted as payment only by a
limited number of undertakings, which can be clearly distinguished by:
(i) their location in the same premises or other limited local area; or
(ii) their close financial or business relationship with the issuing
institution, such as a common marketing or distribution scheme.
The underlying contractual arrangements must provide that the electronic storage
device at the disposal of bearers for the purpose of making payments is subject
to a maximum storage amount of not more than EUR 150.
2. An electronic money institution for which a waiver has been granted under
paragraph 1 shall not benefit from the mutual recognition arrangements provided
for in Directive 2000/12/EC.
3. Member States shall require that all electronic money institutions to which
the application of this Directive and Directive 2000/12/EC has been waived
report periodically on their activities including the total amount of financial
liabilities related to electronic money.
Electronic money institutions subject to this Directive which have commenced
their activity in accordance with the provisions in force in the Member State in
which they have their head office before the date of entry into force of the
provisions adopted in implementation of this Directive or the date referred to
in Article 10(1), whichever date is earlier, shall be presumed to be authorised.
The Member States shall oblige such electronic money institutions to submit all
relevant information to the competent authorities in order to allow them to
assess within six months from the date of entry into force of the provisions
adopted in implementation of this Directive, whether the institutions comply
with the requirements pursuant to this Directive, which measures need to be
taken in order to ensure compliance, or whether a withdrawal of authorisation is
appropriate. If compliance is not ensured within six months from the date
referred to in Article 10(1), the electronic money institution shall not benefit
from mutual recognition after that time.
1. Member States shall bring into force the laws, regulations and administrative
provisions necessary to comply with this Directive not later than 27 April 2002.
They shall immediately inform the Commission thereof.
When Member States adopt these measures, they shall contain a reference to this
Directive or shall be accompanied by such reference on the occasion of their
official publication. The methods of making such a reference shall be laid down
by the Member States.
2. Member States shall communicate to the Commission the text of the main
provisions of national law, which they adopt in the field covered by this
Not later than 27 April 2005 the Commission shall present a report to the
European Parliament and the Council on the application of this Directive, in
- the measures to protect the bearers of electronic money, including the
possible need to introduce a guarantee scheme,
- capital requirements,
- waivers, and
- the possible need to prohibit interest being paid on funds received in
exchange for electronic money,
accompanied where appropriate by a proposal for its revision.
Entry into force
This Directive shall enter into force on the day of its publication in the
Official Journal of the European Communities.
This Directive is addressed to the Member States.
Done at Brussels, 18 September 2000.
For the European Parliament
For the Council
(1) OJ C 317, 15.10.1998, p. 7.
(2) OJ C 101, 12.4.1999, p. 64.
(3) OJ C 189, 6.7.1999, p. 7.
(4) Opinion of the European Parliament of 15 April 1999 (OJ C 219, 30.7.1999, p.
415), confirmed on 27 October 1999, Council Common Position of 29 November 1999
(OJ C 26, 28.1.2000, p. 1) and Decision of the European Parliament of 11 April
2000 (not yet published in the Official Journal). Decision of the Council of 16
(5) Directive 2000/12/EC of the European Parliament and of the Council of 20
March 2000 relating to the taking up and pursuit of the business of credit
institutions (OJ L 126, 26.5.2000, p. 1). Directive as last amended by Directive
2000/28/EC (see page 37 of this Official Journal).
(6) Council Directive 93/6/EEC of 15 March 1993 on the capital adequacy of
investment firms and credit institutions (OJ L 141, 11.6.1993, p. 1). Directive
as last amended by Directive 98/33/EC (OJ L 204, 21.7.1998, p. 29).
(7) Council Directive 91/308/EEC of 10 June 1991 on prevention of the use of the
financial system for the purpose of money laundering (OJ L 166, 28.6.1991, p.