Supervising electronic money institutions
The European Commission has adopted a proposal on the take up, pursuit and prudential supervision of electronic money institutions. These are defined in the proposal as undertakings which issue means of payment in the form of electronic money, or which invest the proceeds from such activities. The proposal would restrict the business activities of such institutions to the provision of closely related financial and non-financial services such as the administering of electronic money. The proposal would also clarify other issues, such as the application of the banking directives to such institutions and the initial capital and ongoing funds requirements for the establishment of electronic money institutions. It also provides for the limitation of investments and the appropriate verification requirements. In addition, the proposal provides for the sound and prudent operation of electronic money institutions in order to respond to the financial and non-financial risks to which the institution is exposed. Supervision requirements would also ensure that the competent authorities in each Member State have access to relevant information, may carry out spot checks, and may require the institution to remedy any shortcomings as identified.