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Nikita Divissenko Law firm VARUL associate

"Establishing a payment institution in Estonia : key legal requirements of the authorisation procedure and current tendencies ". Nikita Divissenko Law firm VARUL associate. EU legislation. Notion of payment / e-money institution Payment Services Directive 2007/64/EC (PSD)

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Nikita Divissenko Law firm VARUL associate

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  1. "Establishing a payment institution in Estonia: key legal requirements of the authorisation procedure and current tendencies" Nikita Divissenko Law firm VARUL associate

  2. EU legislation • Notion of payment / e-money institution • Payment Services Directive 2007/64/EC (PSD) • PSD II – adopted on 8 October 2015 • E-Money Directive (2009/110/EC) (EMD)  • Applicability of EU law principles

  3. Estonian Legislation • Payment Institutions and E-money Institutions Act • Money Laundering and Terrorist Financing Prevention Act

  4. Estonian Supervision Authorities • Main supervisory body: Estonian Financial Supervision Authority (Finantsinspektsioon, EFSA) • Estonian Financial Intelligence Unit (Rahapesu Andmebüroo, AML authority)

  5. Payment Services • Services enabling cash to be placed on a payment account as well as all the operations required for operating a payment account. • Services enabling cash withdrawals from a payment account as well as all the operations required for operating a payment account. • Execution of payment transactions, including transfers of funds on a payment account with the user's payment service provider or with another payment service provider. • Execution of payment transactions where the funds are covered by a credit line for a payment service user. • Issuing and/or acquiring of payment instruments. • Money remittance. • Execution of payment transactions where the consent of the payer to execute a payment transaction is given by means of any telecommunication, digital or IT device and the payment is made to the telecommunication, IT system or network operator. (NB! “full” licence, no turnover or any other limitations on the amount of services provided)

  6. Application • To be submitted to the EFSA • Duration: 3 to 6 months • Powers of the EFSA • Issue or refusal to issue an authorisation

  7. Documentation required • Business plan • Internal rules of procedure • AML • Provision of services • Accounting • Ownership structure (sources of financing) • Organisational structure • IT solutions • Financial reports / data

  8. Capital requirements • 125 000 (350 000) EUR • Source and origin of the funds • Investment policy

  9. Management • 2 + 3 • Fit & Proper • Education and experience • Professional qualifications • Impeccable business reputation

  10. Level of technological organisation • Security • Trustworthiness • Sufficient level of organisation

  11. Cross-border activity • Registration of payment agents • Establishing branches

  12. Recent tendencies • Number of registered payment institutions – 12; • Creditors and Credit Intermediaries Act in force since 29 March 2015 / 21 March 2016; Only 24 licences issued, over 40 applications pending. • Revision of the AML regulation F2F requirement to be amended

  13. Thank you! Спасибо! nikita.divissenko@varul.com www.varul.com

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