Commission consults on revision of the European electronic money regime
| Pages | 347-355 |
| DOI | https://doi.org/10.1108/13581980510635573 |
| Date | 01 December 2005 |
| Published date | 01 December 2005 |
| Author | Bob Penn |
| Subject Matter | Accounting & finance |
Commission consults on revision of the
European electronic money regime
Bob Penn
Allen & Overy, London
Bob Penn is a senior associate in Allen &
Overy’s Regulatory, Funds and Financial
Products Group. He advises on a wide
variety of financial services regulatory
matters in relation to banks and other
financial institutions, securities and deriva-
tives. He has experience in the regulation
of exchanges, trading systems and other
market infrastruture providers. He also
advises on onshore and offshore funds,
including private equity funds, property
funds and hedge funds.
ABSTRACT
KEYWORDS: Europe, electronic com-
merce, money laundering, telecommunica-
tion services
Background to the European Commission con-
sultation on the electronic money directive
(2000/46/EC) with particular reference to the
definition of ‘electronic money’, the impact on
mobile telephone operators, different structures
for payment of goods and services under schemes
for the issue of prepaid electronic value, the reg-
ulatory requirements on banks and e-money
institutions and the application of anti-money
laundering requirements.
The European Commission is currently
consulting
1
on amendments to the electro-
nic money directive (2000/46/EEC — the
e-money directive). This article looks at
the background to the regime, the troubled
definition of electronic money (e-money),
the application of anti-money laundering
requirements to card-based e-money
schemes, and the perceived failings of the
regime, particularly in the context of the
use of mobile telephones.
INTRODUCTION
Mobile telephone operators may not seem
the most likely candidates for financial ser-
vices regulation. However, in Europe, the
introduction of a regulatory regime for
issuers of electronic money (e-money)in
2000 threw into considerable doubt the
question of whether mobile phone opera-
tors (mobile operators) should be subject to
regulation where they take prepayments
which may be used to purchase third party
services and/or goods.
In light of the debate on this issue and
general failure of e-money to make signifi-
cant headway in Europe, the European
Commission issued a questionnaire
2
on the
scope of the e-money regime in this con-
text. This article explains the background
to the debate and why e-money should be
regulated, sets out the consequences of
being an e-money issuer, discusses whether
and to what extent mobile operators
should be subject to the regime, and looks
briefly at the application of money laun-
dering requirements to e-money issuers.
GENESIS OF THE E-MONEY REGIME
E-money has now been around for a sur-
prisingly long time. Mondex commenced
operations in the UK in 1993. The EU cen-
Page 347
Journal of Financial Regulation and Compliance Volume 13 Number 4
Journal of Financial Regulation
and Compliance, Vol. 13, No. 4,
2005, pp. 347–355
#Emerald Group Publishing
Limited, 1358–1988
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