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The issue of electronic money is a 'regulated activity' under the Financial Services and Markets Act 2000 and the EU directive on electronic money. Moneybookers Ltd. is authorised by the FSA to issue electronic money as a specialised electronic money issuer subject to regulatory requirements and supervision.
Key features of the regulation by the FSA include:
- Capital requirements & liquidity — Our business is required to maintain minimum levels of capital. There is an initial and continuous threshold of € 1 million own funds (approx £ 615, 000). We must also hold sufficiently liquid assets to be able to redeem all e-money issued and to meet our working capital requirements.
- Float Management — There is a clear set of regulations on how we can invest the funds received in exchange for the issue of e-money; this is essentially limited to pre-defined low-risk and highly liquid forms of investment such as Zone A government bonds with short maturity.
- Management & Vetting at Entry — Our management is scrutinised by the FSA and all individuals who perform key functions within our business need to be approved by the FSA as "fit and proper". Significant responsibilities such as finance and technical development and money laundering reporting must be apportioned between senior staff.
- Systems & Controls — We must protect our businesses from technological risks such as unauthorised creation, transfer or redemption of e-money. Care must be taken to implement systems and policies to ensure compliance with the FSA's codes of practice. As a regulated company, any e-money issuer must comply with the FSA's principles for business which include observing proper standards of market conduct, arranging adequate customer complaint procedures and having in place adequate risk management systems.
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Money Laundering —
The United Kingdom is part of a wider international effort to meet the challenges of restricting criminal access to the financial system, and participates in international talks to make sure the rules remain effective. New international recommendations were issued in 2003, and in turn the European Union adopted the Third Money Laundering Directive. The UK Government has now implemented new Regulations in the UK to give effect to the European Directive, the Money Laundering Regulations 2007.
The Money Laundering Regulations 2007 require firms to put preventative measures in place. They require firms to ensure that they know their customers (including conducting customer identification and verification and undertake ongoing monitoring where applicable), to keep records of identity and to train their staff on the requirements of the Regulations. A senior member of staff needs to be appointed and approved by the FSA to oversee appropriate policies and procedures.
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Limitation on Business Activity
— e-money issuing must be legally and operationally ‘ring-fenced’
from any other area of business risk, e.g. granting credit is disallowed.
Moneybookers FSA Register No: 214225 |
