Changes from report parliamentary committee draft to plenary report

Added(a) the provision of operational and closely related ancillary services, including ensuring the execution of payment transactions, foreign exchange services, safekeeping activities, and the storage and processing of data;

Added(b) the operation of payment systems;

Added(c) business activities other than the provision of payment services or electronic money services, having regard to applicable Union and national law.

Added2. Payment institutions that provide one or more payment services or electronic money services, shall only hold payment accounts which are used exclusively for payment transactions.

Added3. Any funds received by payment institutions from payment service users to provide payment or electronic money services shall not constitute a deposit or other repayable funds within the meaning of Article 9 of Directive 2013/36/EU.

Added4. Payment institutions may grant credit relating to the payment services referred to in Annex I, point 2, only where all of the following conditions have been met:

Added(a) the credit is ancillary to, and granted exclusively in connection with, the execution of a payment transaction;

Added(b) notwithstanding national rules, if any, on providing credit by issuers of credit cards, the credit granted in connection with a payment and executed in accordance with Article 13(6) and Article 30 is to be repaid within a reasonably short period, to be defined by competent authorities;

Added(c) the credit granted does not come from the funds received or held for executing a payment transaction or from the funds which have been received from payment services users in exchange of electronic money and held in accordance with Article 9, paragraph 1;

Added(d) the own funds of the payment institution are at all times and to the satisfaction of the supervisory authorities appropriate in view of the overall amount of credit granted.

Added5. Payment institutions shall not take deposits or other repayable funds within the meaning of Article 9 of Directive 2013/36/EU.

Added6. Payment institutions that provide electronic money services shall exchange any funds, including cash or scriptural money, received by that payment institution from payment service users for electronic money without delay. Such funds shall neither constitute a deposit, nor other repayable funds received from the public within the meaning of Article 9 of Directive 2013/36/EC.

Added7. This Directive shall be without prejudice to Directive 2008/48/EC, other relevant Union law or national measures regarding conditions for granting credit to consumers not harmonised by this Directive that comply with Union law.

AddedAccounting and statutory audit

Added1. Council Directive 86/635/EEC, Directive 2013/34/EU and Regulation (EC) No 1606/2002 of the European Parliament and of the Council, shall apply to payment institutions mutatis mutandis.

Added2. Unless exempted under Directive 2013/34/EU and, where applicable, Directive 86/635/EEC, the annual accounts and consolidated accounts of payment institutions shall be audited by statutory auditors or audit firms as defined in Article 2, points 2 and 3, of Directive 2006/43/EC.

Added3. For supervisory purposes, Member States shall require that payment institutions provide separate accounting information for, on the one hand, payment services or electronic money services, and, on the other hand, the activities referred to in Article 10(1), which shall be subject to an auditor’s report. That report shall be prepared, where applicable, by the statutory auditors or an audit firm.

Added4. The obligations laid down in Article 63 of Directive 2013/36/EU shall apply mutatis mutandis to the statutory auditors or audit firms of payment institutions in respect of payment services or electronic money services.

AddedRecord-keeping

AddedMember States shall require payment institutions to keep all appropriate records for the purpose of this Title for at least 5 years, without prejudice to Directive (EU) 2015/849 or other relevant Union law. When such records include personal data, the payment institution shall not keep those records for longer than necessary for the purpose of this Title. Where there is a withdrawal of the authorisation of the payment institution in accordance with Article 16, records that include personal data shall not be kept more than 5 years after the authorisation has been withdrawn.

AddedGranting of authorisation

Added1. Member States shall authorise an applicant payment institution for the payment services and electronic money services it intends to provide, provided that the applicant payment institution:

Added(a) is a legal person established in a Member State;

Added(b) has submitted to its competent authorities the information referred to in Article 3(3);

Added(c) has taken into account the need to ensure the sound and prudent management of the applicant payment institution, robust governance arrangements for the payment services or electronic money services it intends to provide, including:

Added(i) a clear organisational structure with well-defined, transparent and consistent lines of responsibility;

Added(ii) effective procedures to identify, manage, monitor and report the risks to which the applicant payment institution is or might be exposed;

Added(iii) adequate internal control mechanisms, including sound administration and accounting procedures.

Added(d) has the initial capital referred to in Article 5;

Added(e) complies with Article 3(4).

AddedThe governance arrangements and control mechanisms referred to in point (c) shall be comprehensive and proportionate to the nature, scale and complexity of the payment services or electronic money services the applicant payment institutions intend to provide.

AddedThe EBA shall adopt guidelines on the arrangements, processes and mechanisms referred to in this paragraph.

Added2. Competent authorities of the home Member State shall grant an authorisation if the information and evidence accompanying the application complies with all of the requirements laid down in Article 3 and if the competent authorities’ overall assessment, having scrutinised the application, is favourable. Before granting an authorisation, the competent authorities may, where relevant, consult the national central bank or other relevant public authorities.

Added3. A payment institution which, under the national law of its home Member State, is required to have a registered office, shall have its head office in the same Member State as its registered office and shall carry out a part of its payment service or electronic money business there. The competent authorities of the Member State where the payment institution is to have its registered office shall however not require the payment institution to carry out the majority of its business in the country where it will have its registered office.

Added4. Competent authorities may, as a condition for authorisation, require that the applicant payment institution establishes a separate entity for the provision of the payment services referred to in Annex I, points 1 to 6, where the applicant payment institution is engaged in other business activities that may impair, or is likely to impair, either the financial soundness of the applicant payment institution or the ability of the competent authorities to monitor the applicant payment institution’s compliance with this Directive.

Added5. Competent authorities shall refuse to authorise an applicant payment institution in any of the following cases:

Added(a) where, taking into account the need to ensure the sound and prudent management of the payment institution, those competent authorities are not satisfied as to the suitability of the shareholders or members that have qualified holdings;

Added(b) where there are close links as defined in Article 4(1), point (38), of Regulation (EU) No 575/2013 between the payment institution and natural or legal persons that do prevent the effective exercise of the supervisory functions of the competent authorities;

Added(c) where the laws, regulations, or administrative provisions of a third country governing one or more natural or legal persons with which the payment institution has close links as defined in Article 4(1), point (38), of Regulation (EU) No 575/2013, or difficulties involved in the enforcement of those laws, regulations or administrative provisions, prevent the effective exercise of the supervisory functions of the competent authorities.

Added6. An authorisation shall be valid in all Member States and shall allow the payment institution concerned to provide the payment or electronic money services that are covered by the authorisation throughout the Union, pursuant to the freedom to provide services or the freedom of establishment.

AddedCommunication of the decision to authorise or refuse authorisation

AddedWithin a maximum of two months of receipt of an application for authorisation as referred to in Article 3, or, where such application is incomplete, of all of the information referred to in Article 3(3), the competent authorities shall inform the applicant whether the authorisation is granted or refused. The competent authority shall give reasons where it refuses an authorisation.

AddedMaintenance of the authorisation as a payment institution

AddedMember States shall require payment institutions to inform their competent authority of any change in the information and evidence provided in accordance with Article 3 which may affect the accuracy of that information or evidence.

AddedWithdrawal of the authorisation as a payment institution

Added1. Competent authorities of the home Member State may withdraw an authorisation issued to a payment institution only where:

Added(a) the payment institution has not made use of its authorisation within 12 months after it has obtained that authorisation, or has not provided any of the services for which it has been authorised for more than six successive months;

Added(b) the payment institution has explicitly renounced that authorisation;

Added(c) the payment institution no longer meets the conditions for granting the authorisation or fails to inform the competent authority on major developments in this respect;

Added(d) the payment institution has obtained the authorisation based on false statements or any other irregular means;

Added(e) the payment institution has breached its obligations in terms of money laundering or terrorist financing prevention under Directive (EU) 2015/849;

Added(f) the continued provision of the payment services or electronic money services by the payment institution would threaten the stability of, or the trust in, the payment system;

Added(g) the payment institution falls within one of the cases where national law provides for such withdrawal.

Added2. The competent authority shall give reasons for any withdrawal of an authorisation and shall inform those concerned accordingly.

Added3. The competent authority shall make public the withdrawal of an authorisation, including in the registers or lists referred to in Articles 17 and 18.

AddedRegister of payment institutions in the home Member State

Added1. Member States shall operate and maintain a public electronic register of payment institutions, including entities registered in accordance with Articles 34, 36, 38, and of their agents or distributors. Member States shall ensure this register contains all of the following information:

Added(a) payment institutions authorised in accordance with Article 13 and their agents ▌or distributors, if any;

Added(b) natural and legal persons registered in accordance with Articles 34(2), 36(1) or 38(1) and their agents or distributors, if any;

Added(c) the institutions referred to in Article 1(2) that are entitled under national law to provide payment or electronic money services.