Changes from report parliamentary committee draft to plenary report

AddedThe payment institution’s own funds shall amount to at least the sum of the following elements multiplied by the scaling factor k referred to in paragraph 3, where payment volume (PV) represents one twelfth of the total amount of payment transactions executed by the payment institution in the preceding year:

Added(i) 4,0 % of the slice of PV up to EUR 5 million;

Addedplus

Added(ii) 2,5 % of the slice of PV above EUR 5 million up to EUR 10 million;

Addedplus

Added(iii) 1 % of the slice of PV above EUR 10 million up to EUR 100 million;

Addedplus

Added(iv) 0,5 % of the slice of PV above EUR 100 million up to EUR 250 million;

Addedplus

Added(v) 0,25 % of the slice of PV above EUR 250 million.

Added(c) Method C

AddedThe payment institution’s own funds shall amount to at least the relevant indicator referred to in point (i), multiplied by the multiplication factor referred to in point (ii) and by the scaling factor k referred to in paragraph 3.

Added(i) The relevant indicator shall be the sum of the following:

Added(1) interest income;

Added(2) interest expenses;

Added(3) commissions and fees received; and

Added(4) other operating income.

AddedEach element shall be included in the sum with its positive or negative sign. Income from extraordinary or irregular items shall not be used in the calculation of the relevant indicator. Expenditure on the outsourcing of services rendered by third parties may reduce the relevant indicator where the expenditure is incurred from an undertaking subject to supervision under this Directive. The relevant indicator shall be calculated on the basis of the 12-monthly observation at the end of the previous financial year. The relevant indicator shall be calculated over the previous financial year.

AddedOwn funds calculated in accordance with method C shall not fall below 80 % of the average of the previous 3 financial years for the relevant indicator. When audited figures are not available, business estimates may be used.

Added(ii) The multiplication factor shall be:

Added(1) 10 % of the slice of the relevant indicator up to EUR 2,5 million;

Added(2) 8 % of the slice of the relevant indicator from EUR 2,5 million up to EUR 5 million;

Added(3) 6 % of the slice of the relevant indicator from EUR 5 million up to EUR 25 million;

Added(4) 3 % of the slice of the relevant indicator from EUR 25 million up to 50 million;

Added(5) 1,5 % above EUR 50 million.

Added3. The scaling factor k to be used in methods B and C shall be:

Added(a) 0,5 where the payment institution provides only the payment service as referred to in point (5) of Annex I;

Added(b) 1 where the payment institution provides any of the payment services as referred to in any of points (1) to (4) of Annex I.

Added4. Member States shall require that payment institutions other than payment institutions that either only offer payment initiation services as referred to in Annex I, point 6, or only offer account information services as referred to in Annex I, point 7, or both, and other than payment institutions offering only electronic money services that also engage in the activities referred to in Article 10 ensure that the own funds held for the services listed in Annex I, points 1 to 5, are not considered as own funds held for the purpose of Article 10, paragraph 4, point (d) or other services not regulated under this Directive.

Added5. Competent authorities may, based on an evaluation of the risk-management processes, risk loss data base and internal control mechanisms of the payment institution, require the payment institution to hold an amount of own funds which is up to 20 % higher than the amount which would result from the application of the method chosen in accordance with paragraph 2. Competent authorities may permit the payment institution to hold an amount of own funds which is up to 20 % lower than the amount which would result from the application of the method to be applied in accordance with paragraph 2.

Added6. The EBA shall develop draft regulatory standards in accordance with Article 16 of Regulation (EU) No 1093/2010 concerning the criteria to determine when the payment institution’s business model is such that they only execute a small number of transactions, but of a high individual value, as referred in paragraph 2 of this Article.

AddedThe EBA shall submit those draft regulatory technical standards to the Commission by [OP please insert the date = 1 year after the date of entry into force of this Directive].

AddedPower is delegated to the Commission to adopt the regulatory technical standards in accordance with Article 10 to 14 of Regulation (EU) No 1093/2010.

AddedCalculation of own funds for payment institutions offering electronic money services

Added1. Notwithstanding the initial capital requirements set out in Article 5, Member States shall require payment institutions offering both payment services and electronic money services to hold, at all times, own funds calculated in accordance with Article 7 for their payment services activity.

Added2. Notwithstanding the initial capital requirements set out in Article 5, Member States shall require payment institutions only offering electronic money services to hold, at all times, own funds calculated in accordance with Method D as set out in point (3) below.

Added3. Method D: The own funds for the activity of providing electronic money services shall amount to at least 2 % of the average outstanding electronic money.

Added4. Member States shall require that payment institutions offering both payment services and electronic money services hold at all times own funds that are at least equal to the sum of the requirements referred to in paragraphs 1 and 2.

Added5. Member States shall allow payment institutions providing both payment services and electronic money services which carry out any of the activities referred to in Annex I that are not linked to the electronic money services, or any of the activities referred to in Article 10 paragraphs 1 and 4, to calculate their own funds requirements on the basis of a representative portion assumed to be used for the electronic money services, provided that such a representative portion can be reasonably estimated on the basis of historical data and to the satisfaction of the competent authorities, where the amount of outstanding electronic money is unknown in advance. Where the payment institution has not completed a sufficient period of business, its own funds requirements shall be calculated on the basis of projected outstanding electronic money evidenced by its business plan subject to any adjustment to that plan required by the competent authorities.

Added6. Paragraphs 4 and 5 of Article 7 shall apply mutatis mutandis to payment institutions providing electronic money services.

AddedSafeguarding requirements

Added1. Member States shall require a payment institution which provides payment services as referred to in Annex I, points (1) to (5), or electronic money services, to safeguard all funds it has received from payment service users or through another payment service provider for the execution of payment transactions, or where applicable the funds received in exchange for electronic money that has been issued, in either of the following ways:

Added(a) those funds shall not be commingled at any time with the funds of any natural or legal person other than the payment service users on whose behalf the funds are held;

Added(b) those funds shall be covered by an insurance policy or some other comparable guarantee from an insurance company or a credit institution, which does not belong to the same group as the payment institution itself, for an amount equivalent to the amount that would have been segregated in the absence of the insurance policy or other comparable guarantee, payable in the event that the payment institution is unable to meet its financial obligations.

AddedFor the purposes of the first subparagraph, point (a), where the payment institution still holds the funds and has not yet by the end of the business day following the day when the funds have been received, delivered those funds to the payee or transferred those funds to another payment service provider, the payment institution shall do either of the following:

Added(a) deposit those funds either in a separate account in a credit institution authorised in a Member State, or at a central bank at the discretion of that central bank;

Added(b) invest those funds in secure, liquid low-risk assets, as determined by the competent authorities of the home Member State;

AddedPayment institutions shall insulate those funds in accordance with national law in the interest of the payment service users against the claims of other creditors of the payment institution, in particular in the event of insolvency.

Added2. Payment institutions shall avoid concentration risk to safeguarded customer funds by, where appropriate, ensuring that the same safeguarding method is not used for the totality of their safeguarded customer funds. In particular, they shall endeavour not to safeguard all consumer funds with one credit institution.

Added3. Where a payment institution is required to safeguard funds under paragraph 1 and a portion of those funds is to be used for future payment transactions with the remaining amount to be used for services other than payment services, that portion of the funds to be used for future payment transactions shall also be subject to the requirements of paragraph 1. Where that portion is variable or not known in advance, Member States shall allow payment institutions to apply this paragraph on the basis of a representative portion assumed to be used for payment services, provided that such a representative portion can be reasonably estimated on the basis of historical data to the satisfaction of the competent authorities.

Added4. Where a payment institution provides electronic money services, funds received for the purpose of issuing electronic money need not be safeguarded until the funds are credited to the payment institution’s payment account or are otherwise made available to the payment institution in accordance with the execution time requirements laid down in Regulation XXX [PSR]. In any event, such funds shall be safeguarded by no later than the end of the business day following the day when the funds have been received, after the issuance of electronic money.

Added5. Where a payment institution provides electronic money services, for the purpose of application of paragraph 1, secure, low-risk assets are asset items falling into one of the categories set out in Table 1 of Article 336(1) of Regulation (EU) No 575/2013 for which the specific risk capital charge is no higher than 1,6 %, but excluding other qualifying items as defined in Article 336(4) of that Regulation.

AddedFor the purposes of paragraph 1, secure, low-risk assets are also units in an undertaking for collective investment in transferable securities (UCITS) which invests solely in assets as specified in the first subparagraph.

AddedIn exceptional circumstances and with a proper justification, the competent authorities may, based on an evaluation of security, maturity, value or other risk elements of the assets as specified in the first and second subparagraphs, determine which of those assets shall not be considered as secure, low-risk assets for the purposes of paragraph 1.

Added6. A payment institution shall inform the competent authorities in advance of any material change in measures taken for safeguarding of funds received for payment services provided and in case of electronic money services in exchange for electronic money issued.

Added7. The EBA shall develop regulatory technical standards on safeguarding requirements, laying down in particular safeguarding risk management frameworks for payment institutions to ensure protection of users’ funds, and including requirements on segregation, designation, reconciliation, insulation and calculation of safeguarding funds requirements and avoiding liquidity and concentration risk.

AddedThe EBA shall submit those draft regulatory technical standards to the Commission by [OP please insert the date = 1 year after the date of entry into force of this Directive].

AddedPower is delegated to the Commission to adopt the regulatory technical standards referred to in the first subparagraph in accordance with Articles 10 to 14 of Regulation (EU) No 1093/2010.

AddedActivities

Added1. In addition to the provision of payment services or electronic money services, payment institutions shall be entitled to engage in the following activities: