Licensing and supervision of Payment Institutions
The Payment Services Directive (Directive 2007/64/EC) has been transposed into the Cypriot legal order, thus allowing for the licensing of payment institutions providing payment services, under the regulation of the Central Bank of Cyprus.
A ‘Payment Institution’ as defined by the relevant Directive is a legal person that has been authorized to provide and execute payment services throughout the EU. The payment services that can be offered with such license, issued by the Central Bank, are the following:
Services enabling cash to be placed on a payment account as well as all the operations required for operating a payment account
Services enabling cash withdrawals from a payment account as well as all the operations required for operating a payment account
Execution of payment transactions, including transfers of funds on a payment account with the user’s payment service provider or with another payment service provider
Execution of payment transactions where the funds are covered by a credit line for a payment service users
Issuing and/or acquiring of payment instruments
Execution of payment transactions where the consent of the prayer to execute a payment transaction is given by means of any telecommunication and the payment is made to the telecommunication, IT system or network operator, acting only as an intermediary between the payment service, user and the supplier of the goods and services.
The company applying for a payment institution license shall have an initial capital of at least:
The company applying for a payment institution licence shall have an initial capital of at least:
An authorization for the operation of a payment institution is only granted to legal persons which have been incorporated and have their head office in Cyprus.
Aspects that must be complied with for a legal person to be authorized as a payment institution under Cyprus law include the following:
The amount of the initial capital as well as the amount of own funds that payment institutions are required to maintain The methods for safeguarding the funds received by payment institutions The delegation of operational functions to third parties.
The exercise of the freedom of establishment and the freedom to provide services in another EU member state The criteria which an agent of a payment institution must fulfil in order to be listed in the public register maintained by the Central Bank of Cyprus.
Legal Representation, Advice and Support Services to be provided:
A description of the internal control mechanisms which the applicant has established in order to comply with obligations in relation to the Prevention and Suppression of Money Laundering Activities Laws of 2007 and 2010 and Regulation (EC) No 1781/2006 of the European Parliament and of the Council of 15 November 2006 on information on the payer accompanying transfers of funds, as amended or replaced.
A description of the participation of the applicant in a national or international payment system as well as the intended arrangements for outsourcing of operational activities, the intended use of agents and branches and the intended use of natural or legal persons for the distribution and redemption of electronic money.
The identity of the persons that have, directly or indirectly, control of the applicant, including the identity of the natural persons that hold, directly or indirectly, shares or voting rights in one or more legal persons that have control of the applicant, as well as details on the size of the actual participation of these persons and their suitability, taking into account the need to ensure the sound and prudent management of an electronic money institution.
The identity of directors and persons responsible for the management of the electronic money institution and, where relevant, persons responsible for the management of the issue of electronic money and the provision of payment services activities, as well as evidence that they are of good repute and possess appropriate knowledge and experience to issue electronic money and perform payment services, and in particular copy of clean criminal record report, non-bankruptcy report, description of professional and academic qualifications, managerial or board positions held in other legal persons, previous employments and experience in the issue of electronic money and the provision of payment services. The majority of the board must be Cyprus resident to apply the 12.5% corporate tax.
The identity of statutory auditors along with a description of its audit arrangements and the organizational arrangements it has set up with a view to taking all reasonable steps to protect the interests of the holders of electronic money and of the users of payment services and to ensure continuity and reliability in the issue of electronic money, including the redemption of electronic money, and to ensure continuity and reliability in the performance of payment services.
The applicant’s legal status and articles of association
The address of the applicant’s head office. Will be required to have their own office when the application for the license is submitted.
Agree and document any outsourcing arrangements and service level agreements between the client and other companies.
Generally legal support and advice on all aspects of Cypriot Law, regarding the Emoney License application and any other legal matter that may be raised. Legal support and preparation and/or perusal and correction on Agreements and legal advice as and when necessary.