A Bill To Trans-pose the 2nd E-Money Directive

• To adapt the second EU Directive on E-Money Issuers (2009/110/CE) into French law, the government has been compelled to draft a bill in Parliament, after the Constitutional Council forbade last March to do it by decree alone. This text (EMD2, N°2009/110/CE) should have already been transposed for more than a year (April 2011).

• Its content should not evolve much however. As is, the draft bill is expected to make EMIs (E-Money Issuers) a full-fledge category of financial institutions, distinct from that of credit institution (bank) and of finance company (“société financière”). An EMI could be hybrid, i.e. offer payment services (therefore enjoying PI status). It should however comply with the EMD2 provisions on funds received to issue and manage e-money. This implies among other to separate them from funds used for payment operations under the PSD regime.

• Under an average amount of issued e-money –to be stated in a decree– EMIs may be exempted from certain prudential and internal audit requirements.

• For e-money used “within a limited network of service providers” or “for a limited range of goods or services”, to be precisely defined in the text, complete exemption of the EMI status will be possible. E-money instru-ments would then be loaded to a specific maximum amount set by decree.

See March 2012 Insight

Source: pic2europe.fr

• In the of spring, the European Commission has sent a motivated opinion to the six Member States that have not fully transposed the EMD2 yet: Belgium, Cyprus, Spain, France, Poland and Portugal. They have two months to comply before the Commission reserves the right to launch a contentious action at the European Court of Justice. The latter’s jurisprudence states that a citizen may invoke a not transposed directive, but only if its dispositions are precise enough, which is not the case of EMD2. The second EMI Directive cannot apply without trans¬position, even if its deadline is now missed.

• The French draft bill seems to take in some ACP’s additional requirements. For instance, foreign “passporting” EMIs would be compelled to nominate a permanent representative in France.