Submission #4

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GVS Prepaid Ltd

Question 1: Do you agree with the criteria for a requirement to appoint a Central Contact Point (CCP)? In particular, • do you agree that it is proportionate to require the appointment of a CCP where - the number of establishments is equal to, or exceeds, ten; or - the amount of electronic money distributed and redeemed, or the value of the payment transactions executed by such establishments is expected to exceed EUR 3 million per financial year or has exceeded EUR 3 million in the previous financial year? If you do not agree, clearly set out your rationale and provide supporting evidence where available. Please also set out at what level these thresholds should be set instead, and why. • do you agree that Member States should be able to - require all institutions, or certain categories of institutions, to appoint a CCP where this is commensurate with the ML/TF risk associated with the operation of these institutions’ establishments on the Member State’s territory; and - empower competent authorities to require an institution to appoint a CCP where they have reasonable grounds to believe that the establishments of that institution present a high money laundering and terrorist financing risk, even if the criteria in Article 3 (1) and (2) of these draft RTS are not met. If you do not agree, clearly set out your rationale and provide supporting evidence where available.

Whilst we do not have any significant issues with the critieria above, our biggest concern is the appoint of a CCP for electronic money issuers who may exceed the EUR 3 million criteria which could be considered small in the payment service provider market and may have a small number of employees. €3 million in electronic money is not large in today’s market and could be an issuer who passports into two or three companies through subsidiary companies rather than through formal arrangements with unconnected third parties.

We would therefore like to see a further criteria be considered that where a company issues electronic money through a closely connected company, a CCP does not need to be appointed. For example where an electronic money issuer that is regulated by the UK FCA, passports into another member state and distributes through a company in the same group of companies, we believe a CCP should not be a requirement. The ‘group’ function (whether that is for example compliance or legal) should be able to perform the function of a CCP. The host state regulator would still need to be notified of who the contact point is for information/communications. With electronic methods of communications, information can be sent to someone overseas as quick as it can be sent to individuals in the same jurisdiction.

Question 2: Do you agree that the functions a CCP must always have are necessary to ensure that • the CCP can ensure, on the appointing institutions’ behalf, establishments’ compliance with the host Member State’s AML/CFT requirements? • Facilitate supervision by the host Member State’s competent authorities? If you do not agree, please explain which functions you think the CCP should have, and why.

We believe a Contact Point, whether based in one country or covering a number of firms cross border, would have the functions indicated and have the responsibility to ensure compliance with the host member states conduct of business rules. Therefore we do not see the need to legislate for this.

Question 3: Do you agree that CCPs should be required to fulfil one or more of the additional functions in Article 6 of these draft RTS where this is commensurate to the ML/TF risk associated with the operation of establishments other than a branch on the host Member State’s territory? If you do not agree, clearly set out your rationale and provide supporting evidence where available. Please also set out whether you think that these additional functions should be core functions instead, and if so, why.

Whilst we do not have any significant issues with the functions indicated in Article 6, we are concerned that to appoint someone with the level of skills and knowledge to perform the role, which may not be seen as a fully time position, will incur potentially significant costs (salary etc.). Therefore, to justify the costs of the additional employee, the role could include other functions not related to compliance and thus could lead to potential Conflicts of Interest.

Question 4: What level of resource (financial and other) would be required to comply with these RTS? Please differentiate between one-off (set-up) costs and ongoing (running) costs. When providing your answer, please consider that the ESAs’ mandate in Article 45(10) of Directive (EU) 2015/849 does not extend to determining the form a CCP should take.

Appointing a CCP will significantly increase the overheads including salary, pensions, office space and for some firms could mean the difference between making a small profit to making no profit at all.

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Name of organisation GVS Prepaid Ltd