Question ID
2023_6790
Legal act
Directive 2015/2366/EU (PSD2)
Topic
Authorisation and registration
Article
8
Paragraph
2
COM Delegated or Implementing Acts/RTS/ITS/GLs/Recommendations
Not applicable
Article/Paragraph
N/A
Name of institution / submitter
Finantsinspektsioon
Country of incorporation / residence
Estonia
Type of submitter
Competent authority
Subject matter
Multi-licensed entity capital requirement
Question

Should a payment institution that also has a crowdfunding license meet the capital requirements of both authorizations in aggregate?

Background on the question

A crowdfunding service provider may itself, or through a third party, provide payment services according to the article 8 paragraph 4 stemming from Regulation (EU) 2020/1503 of the European Parliament and of the Council of 7 October 2020 on European crowdfunding service providers for business, and amending Regulation (EU) 2017/1129 and Directive (EU) 2019/1937.

That means, crowdfunding service providers may hold payment institution (PI) license and vice versa. If a PI entity is also authorized as a crowdfunding service provider, it needs to meet both capital requirements.

PSD2 article 8 paragraph 2 states that Member States shall take the necessary measures to prevent the multiple use of elements eligible for own funds where the payment institution belongs to the same group as another payment institution, credit institution, investment firm, asset management company or insurance undertaking. This paragraph shall also apply where a payment institution has a hybrid character and carries out activities other than providing payment services.

Last sentence of the before mentioned paragraph says that if payment institution has a hybrid character and carries out activities other than providing payment services, then own funds elements can’t be used multiple times. Unfortunately, it has not been further clarified whether ban of multiple use means aggregating the capital requirements of both licenses.

For example: same entity holds both PI and crowdfunding service provider authorizations. For example own funds requirement for PI is 2 EUR and own funds requirements for crowdfunding service is 1 EUR.

  1. If PSD2 article 8 paragraph 2 means aggregation of own funds, then entity holding two authorizations would have to meet the both capital requirement separately i.e. 1+2=3.
  2. If PSD 2 article 8 paragraph 2 doesn’t mean aggregation of own funds, but application of a higher capital requirement, which also covers the lower capital requirement resulting from the second authorization, then entity should have own funds in the sum of 2, that covers both capital requirements considered separately (non aggregated).
Submission date
Final publishing date
Final answer

Payment institutions (PIs) are subject to initial capital and own funds requirements under Directive (EU) 2015/2366 (PSD2).

In accordance with Article 8(2) of PSD2, the elements eligible for own funds must not be used multiple times in situation where the payment institution belongs to the same group as another payment institution, credit institution, investment firm, asset management company or insurance undertaking.

Article 10(4) of Regulation (EU) 2020/1503 on European crowdfunding service providers for business (ECSPR) stipulates that: 'A crowdfunding service provider may itself, or through a third party, provide payment services provided that the crowdfunding service provider itself, or the third party, is a payment service provider in accordance with Directive (EU) 2015/2366'.

Article 11(1) of the same Regulation sets out prudential requirements applicable to crowdfunding service providers. Article 11(4) further states that such prudential requirements ‘[do] not apply to crowdfunding service providers that are undertakings subject to Articles 4 and 5 of Directive 2009/110/EC or Articles 7 to 9 of Directive (EU) 2015/2366’.

It follows from the above that a PI which provides crowdfunding services in accordance with the ECSPR is not required to comply with the prudential requirements in Article 11(1) of the ECSPR.

 

Disclaimer: The answer clarifies provisions already contained in the applicable legislation. They do not extend in any way the rights and obligations deriving from such legislation nor do they introduce any additional requirements for the concerned operators and competent authorities. The answers are merely intended to assist natural or legal persons, including competent authorities and Union institutions and bodies in clarifying the application or implementation of the relevant legal provisions. Only the Court of Justice of the European Union is competent to authoritatively interpret Union law. The views expressed in the internal Commission Decision cannot prejudge the position that the European Commission might take before the Union and national courts.

Status
Final Q&A
Answer prepared by
Answer prepared by the European Commission because it is a matter of interpretation of Union law.

Disclaimer

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