Questionnaire on the Electronic Money Directive (2000/46/EC)

Transcription

1 Questionnaire on the Electronic Money Directive (2000/46/EC) Comments of the Association Professionnelle des Emetteurs de Titres de Services (APETDS) September / Review of the primary goals of the E-money Directive Question 1 As they are neither Electronic Money Institution within the meaning of the Directive ( ELMIs ) nor other pre-paid service providers issuing E-Money nor credit institutions issuing E-Money, the Issuers of services vouchers and cards do not have any comment on the questions related to competition between ELMIs and between ELMIs and credit institutions. However, APETDS members feel that due to the lack of clarity of the definition of E-Money, competition in the E-Money sector has not developed as previously expected. a) Has a level playing-field between ELMIs and other credit institutions issuing E-Money been achieved? b) Has a level playing-field between ELMIs and other pre-paid payment service providers issuing E-Money been achieved? c) Has the Directive encouraged competition? If so, is competition between institutions issuing E- Money fair? d) Has the Directive encouraged new market entrants? Question 2 As they do not issue E-Money within the meaning of the Directive, the Issuers of service vouchers and cards do not have any comment on the questions regarding the legal framework of ELMIs. a) Have the harmonised provisions of the E-Money Directive eliminated legal uncertainty in the field of E-Money? 1/12

2 b) Does the Directive establish the conditions necessary to ensure that any kind of E-Money issuance take place within a legal framework? c) Does the Directive establish market confidence in, and public awareness of, E-Money? Question 3 As they do not constitute ELMIs, the Issuers of service vouchers and cards do not have any comment on the questions regarding the prudential framework of ELMIs. a) Has the regulatory prudential framework achieved its objective of ensuring stability and soundness of issuers? b) Has the regulatory prudential framework increased business and consumer confidence in E- Money products? Question 4 As they do not issue E-Money within the meaning of the Directive, APETDS members do not have any comment on the questions limited to the development of E-Money. On the other hand, APETDS members have specific comments on the impact of the Directive on technological innovation outside the E-Money market, in particular on the service vouchers and cards market. a) Has the regulatory framework of the E-Money Directive assisted the development of E-Money in the context of electronic commerce and avoided hampering technological development? b) Has the Directive encouraged technological innovation? As stated in the Explanatory Memorandum, one of the aims of the Directive was, within the wider context of the rapidly evolving electronic commerce, to provide a regulatory framework that avoided hampering technological innovation in particular. In that respect, APETDS members consider that the Directive has a negative impact on technological innovation on the market of service vouchers and cards. Such a negative impact is mainly due to the fact that the Issuers of service vouchers and cards are not expressively excluded of the scope of the Directive. Such a risk generates legal uncertainty which makes the Issuers of service vouchers and cards reluctant to develop new dematerialised vouchers, cards or any other similar devices, as they do not 2/12

3 know precisely how and to which extent they should adapt their operational processes and organisation in case they would be submitted to the ELMIs legal framework.. Accordingly, APETDS members suggest that article 1 of the Directive be completed with the following: Shall be excluded of the scope of the Directive, as they do not constitute means of payment, vouchers, instruments, cards or similar devices provided to users, with the aim of allowing their beneficiaries to acquire goods or services provided within a limited network of affiliated service providers. Question 5 As they do not issue E-Money, the Issuers of service vouchers and cards do not have any comment on the questions of cross-border development of E-Money activities. a) Has the E-Money Directive facilitated access by ELMIs from one Member State to another? b) To what extent has the E-Money Directive facilitated integration of E-Money Market across the EEA? Question 6 As they do not issue E-Money, the Issuers of service vouchers and cards do not have any comment on the question of technological rules and constraints imposed on E-Money. a) Has the regulatory framework of the E-Money Directive enabled the development of E-Money unimpaired by strict technological rules? No specific comment b) To what extent has the regulation of E-Money succeeded in its original aim of remaining technologically neutral? Question 7: Goals of the E-Money Directive Given the direct and indirect implications that the E-Money rules may have for the development of service vouchers and cards, APETDS members have specific comments to make as to the goals of the Directive and the results achieved in that respect. a) Do you agree that the original goals of the E-Money are those which the Commission has identified above? The Issuers of service vouchers and cards share the view of the Commission that the Directive should have contributed to: 3/12

4 - ensuring the stability and soundness of issuers, thereby ultimately safeguarding customer s interests; - developing E-commerce. In that respect, APETDS members bring the attention of the Commission on the fact that these objectives do not only regard E-Money but also any other activities which could contribute to the development of E-Commerce. This is notably the case of service vouchers and cards. However, APETDS members consider that the legal uncertainty generated by the Directive has contributed to missing several initial goals of the text, in particular: - the legal security and consequently, the protection of the consumer interest on the E-Money market but also on other markets such as the service vouchers and cards market. Indeed, the lack of precision of the definition of the E-Money led to legal uncertainty as the Directive does not expressively exclude the Issuers of service vouchers and cards. They should be excluded of the scope of the Directive as they do not constitute means of payment, whatever their support: (i) (ii) (iii) they are not of general purpose. The service vouchers and cards are governed by the speciality principle. They can not be used for an other purpose of the one they were created for. they are not fungible, which means that they can not be used or exchanged against another vouchers or cards created for a different goal. In the same vain, they are not redeemable in coins and bank notes or in any other kind of means of payment. finally, the use of service vouchers and cards is strictly limited in time. - the development of the E-Commerce Because of the legal uncertainty created by the Directive, Issuers of service vouchers and cards are reluctant to develop new dematerialised vouchers, cards or any other similar devices. The reluctance of Issuers to propose dematerialised vouchers and cards to their clients is due to the fact that if they were submitted to the obligations imposed on the ELMIs, they would be obliged to deeply reform their internal organisation and the way they exercise their activities. In concrete terms, the statute of the ELMIs would imply for the Issuers of service vouchers and cards an in-depth legal and economic reorganisation with new constraints and significant extra costs. Amongst other, the Issuers of service vouchers and cards would be obliged: (i) (ii) to get an agreement, to limit the aggregated structure activities to the only E-Money issuing. That would imply the creation of a different new legal entity for dematerialised activities. 4/12

5 (iii) (iv) (v) (vi) to limit their participations in other undertakings, except where these undertakings perform operational or other ancillary functions related to electronic money issued or distributed by the institution concerned, to change the composition of their management bodies within a view to employ new experienced managers in the management of finance companies, to develop additional structures and instruments of control, to create a specific structure against the money-laundering. These obligations are not appropriate to the activities of the Issuers given the fact that they are not exposed to the same risks as the issuing of money: (i) (ii) they cannot lead to inflationist risks nor to any systemic risk which would justify prudential supervisory arrangements; the strictly framed use of service vouchers and cards and the particular devices of traceability do considerably reduce the risks of smuggling, counterfeiting and money-laundering. Furthermore, the submission of service vouchers and cards Issuers to the legal obligations imposed on ELMIs would generate extra-costs which would inevitably be transferred, at least partially, on consumers. In view of these risks, service vouchers and cards Issuers have preferred so far not to, develop the dematerialised service vouchers and cards even though a demand from the consumers for this kind of services clearly exists. b) Is there a risk that the goals as set out above conflict with another (e.g. the need to ensure stability and soundness vs. encouraging new market entrants and assisting the development of E-Money? c) Is there a need to re-assess the original goals and to perhaps establish new goals? If so, what should these be? The Issuers of service vouchers and cards are of the opinion that the Commission should reaffirm its initial goals, especially the need for legal security and the development of E-Commerce. They consider that such goals could be reached by a clarification of the scope of the Directive through a narrower definition of E-Money, excluding expressively their activities. d) Should e.g. establishing consistency with the New Legal Framework for Payments be considered as a new goal? APETDS members obviously consider that establishing consistency between the various texts is of the utmost importance. In particular, they consider that, whatever the solution finally elected (i.e. one or two texts), it should be explicitly recognised at EU level that services vouchers and cards neither constitute E-Money nor other means or instruments of payment. 5/12

6 2/ Review of the Directive in accordance with Article 11 of Directive 2000/46/EC Question 8 As they do not constitute ELMIs, the Issuers of service vouchers and cards do no have any comment on the questions regarding the protection of E-Money bearers. a) Has the Directive created an appropriate legal background to protect E-Money bearers? b) Have there been cases of consumer detriment caused by the lack of adequate measures to protect E-Money bearers? c) Is there a need for additional measures aimed at the protection of bearers of Electronic Money? d) If so, how should it be founded? Question 9 As they do not constitute ELMIs, the service vouchers and cards do not have any comment on the questions regarding the capital requirements. a) Is there a need to review provisions on initial capital and ongoing own funds requirements? b) Are the requirements of the Directive proportionate to risks E-Money institutions are exposed to? Question 10 As they do not constitute ELMIs, the Issuers of service vouchers and cards do not have any comment on the questions regarding the waivers rules. a) What has been your practical experience of the application of waiver rules? b) Do the existing rules correspond to the needs and realities of E-Money business? c) Should the rules on waivers be changed, and if so in which way? 6/12

7 d) Could the extensive and consistent application of waivers encourage E-Money issuance at national level? e) Should the threshold of financial liabilities ( 6 million) related to outstanding E-Money be amended or removed? f) Is the amount of maximum storage at the disposal of bearers for the purpose of making payment ( 150) still relevant in the case of a waiver? g) Is there a need to allow the competent authorities of Member States to waive the application of provisions of the Directive in other specific cases not provided for in the Directive? h) Should the waiver be granted automatically or should every waiver be decided by the competent authority case by case? Question 11 As they do not constitute ELMIs, the Issuers of service vouchers and cards do not have any comment on the questions regarding the eventually payment of interests on funds received in exchange for E- Money. a) Are they any examples of ELMIs having offered to pay interest on E-Money or demanding the right to pay interest? b) Is there a need to prohibit interest being paid on funds received in exchange for Electronic Money? 3/ Review of Other Provisions of the Directive Article 1: scope of the Directive, definitions of electronic money institution and electronic money and restriction of activities Question 12 a) Should the definition of E-Money institution be broadened/narrowed to cover/exclude institutions issuing prepaid means of payment for their core service but which may also issue E- 7/12

8 Money as a non-core part of their business (e.g. mobile operators and other hybrid institutions )? APETDS members do not clearly understand which institutions constitute hybrid institutions. As far as they are concerned, they consider that they do not constitute hybrid institutions as they neither issue pre-paid means of payment nor E-Money. Consequently, the definition of E-Money cannot be considered as including their activities. Indeed, the service vouchers and cards cannot be assimilated, whatever their support, to any kind of means of payment: a) they are not of general purpose. The service vouchers and cards are governed by the speciality principle. They can not be used for an other purpose of the one they were created for. b) they are not fungible, which means that they can not be used or exchanged against another vouchers or cards created for a different goal. In the same vain, they are not redeemable in coins and bank notes or in any other kind of means of payment. c) finally, the use of service vouchers and cards is strictly limited in time. As previously specified, those criteria indifferently apply to paper service vouchers as to dematerialised service vouchers and cards. b) Should a special EU regime be introduced for institutions issuing E-Money as a non-core part of their business (e.g. mobile operators and other hybrid prepaid instrument providers)? As they are neither ELMIs nor institutions issuing E-Money as a non-core part of their business, the Issuers of service vouchers and cards do not have any comment on this particular question. Question 13 a) Is the definition of E-Money appropriate and adapted to any kind of E-Money issuance? As they do not issue E-Money, the Issuers of service vouchers and cards have no specific comment on this particular question. b) For the sake of clarity and to avoid any legal uncertainty, does the definition of E-Money need to be clarified? Has the definition of E-Money given rise to different interpretations, either across different business models or as result of different Member States interpretations? The definition of E-Money should be clarified in order to avoid any lack of precision as it is currently the case for Issuers of service vouchers and cards. To ensure their necessary legal security, the definition of E-Money should be modified in a way of excluding expressively the service vouchers and cards from the scope of the Directive as they do not constitute means of payment. Accordingly, APETDS members suggest that article 1 of the Directive be completed with the following: Shall be excluded of the scope of the Directive, as they do not constitute means of payment, vouchers, instruments, cards or similar devices provided to users, with the aim of allowing their 8/12

9 beneficiaries to acquire goods or services provided within a limited network of affiliated service providers. c) Does the definition of E-Money correspond to the way the market has developed or is likely to develop?. d) Is there a need to review the definition of E-Money? In order to avoid any risk of legal uncertainty for their activities, APETDS members suggest that the Directive expressively excludes the service vouchers and cards of its scope. e) Do the three criteria in the definition of E-Money (stored on electronic device, issued on receipt of funds not less than monetary value issued, accepted by undertakings other then issuer) constitute the determining elements as to what really constitutes electronic money? f) Would it be appropriate to introduce a reference to any prepaid float/funds allocated to payment? g) Which payment instruments is your experience/country fall under the definition of E-Money? Should the definition of E-Money cover pre-paid products of mobile operators? Question 14 As they do not constitute ELMIs, the Issuers of service vouchers and cards do not have any comment on the questions regarding the limitation of the ELMIs activities. a) Is the limitation of E-Money institutions activities too restrictive? b) Does the limitation of activities discourage new entrants restrict competition or hinder innovation? c) Does the limitation of activities contribute to preserving a level playing field between ELMIs and other credit institutions or alternatively disadvantage ELMIs in comparison with other credit institutions that issues E-Money? d) Does the restriction on the granting of any form of credit have an impact on the payment possibilities offered through E-Money instrument? For example, does the delay in some payment transaction constitute credit in your experience/member State? 9/12

10 Article 2: application of the banking Directives Question 15 As they are neither ELMIs nor credit institutions, the Issuers of service vouchers and cards do not have any comment on the questions regarding the application of the banking directives. a) Has the application the application of the passporting provisions of Directive 2000/12/EC given rise to any specific problems? b) To what extent has the single passport been used by licensed ELMIs? c) Is it still valid to define ELMIs as a credit institution under Directive 2000/12/EC (as amended) despite the fact that ELMIs are legally barred from granting and from paying interest on funds received in exchange for E-Money issued? Question 16 As they are neither ELMIs nor credit institutions, the Issuers of service vouchers and cards do not have any comment on the questions regarding the application of the banking directives. a) Is it still valid to distinguish between the different nature of the issuance of electronic money and a deposit-taking activity in the interests of bearer confidence? b) If funds received are immediately exchanged for E-Money, at which point in time does the conversion into E-Money actually take place? c) Should the notion of deposit-taking in Article 3 of Directive 2000/12/EC be clarified? Article 3: Redeemability requirements Question 17 As they do not issue E-Money within the meaning of the Directive, the Issuers of service vouchers and cards do not have any comment on the questions regarding the redeemabilty requirements. a) Does redeemability at par value pose any special problems for E-Money issuers? 10/12

11 b) How could this rule be adapted to institutions issuing E-Money as a non-core part of their business (for example, mobile operators) for which the E-Money float on prepaid cards or accounts is only known ex post when customers have purchased goods and services from a third party? c) Is a minimum threshold of EUR 10 for redemption at par value still relevant? Article 5: Limitations of investments Question 18 As they are neither ELMIs nor credit institutions, the Issuers of service vouchers and cards do not have any comments on the questions regarding the limitations of investments. a) Have the provisions of the Directive on limitation of investments achieved their aim of establishing a level playing field between ELMIs and credit institutions? b) Are the provisions of the Directive too restrictive for ELMIs? c) If so, have they deterred new market entrants, restricted competition or hindered innovation? 4/ Customer due diligence in the context of Money Laundering and FAFT Special Recommendation Question 19 As they do not constitute ELMIs, the Issuers of service vouchers and cards do not have any comment on the questions regarding the customer due diligence in the context of Money Laundering and FAFT Special Recommendation VII. a) Do national customer due diligence provisions, such as Know Your Customer, record keeping requirements and other established principles in banking law pose specific problems to the issuance of electronic money despite the exemptions foreseen for E-Money? If so, which? b) Is it possible to sell anonymous pre-paid cards (or other electronic devices) in your country? 5/ E-money Market Developments 11/12

12 As they do not constitute ELMIs, the Issuers of service vouchers and cards do not have any comments on the questions regarding E-money market developments. a) Would you agree that the E-Money market has either failed to develop to or not yet reached its full potential? b) If so, what are the main reasons for the limited development of the E-Money market? c) Have any particular obstacles constrained the E-Money market growth across the EEA? d) What are the prospects for the future development of E-Money? e) Is the E-Money Directive adapted to the market conditions? f) If not, there are many amendments to the Directive which are needed in order to reflect the E- Money market developments, especially as regards technological innovations? g) Are there any obstacles in the taxation area constraining the E-Money market development? h) What changes, if any, might be needed to the E-Money legal framework in the light of forthcoming Directive on Payment services? 12/12