Operating licences of elecctronic money institutions

Electronic money may only be issued in Iceland by entities that qualify as electronic money issuers within the meaning of Act No. 17/2013 (in icelandic) on the Issuance and Handling of Electronic Money, provided that they have obtained the required authorisation from the Central Bank of Iceland (CBI) or the competent authorities of another state within the European Economic Area (EEA).

Pursuant to Point 8 of Article 4 of the Act, only the following entities may issue electronic money:

1. Electronic money institutions authorised pursuant to Chapter III of the Act.
2. Financial undertakings authorised to accept deposits or other repayable funds from the public and to grant credit for their own account.
3. The European Central Bank (ECB) and the central banks of EEA states when not acting in their capacity as monetary authorities.
4. Public authorities when acting in their capacity as public authorities.

An application for authorisation as an electronic money institution must be submitted in writing and accompanied by the information specified in Chapter III of the Act. The CBI has prepared an overview of the information that it requires to accompany an application.

The CBI supervises electronic money institutions and other electronic money issuers pursuant to Article 28 of the Act. On this basis, the CBI has issued Rules No. 322/2014 (in icelandic) on the safeguarding of funds of electronic money institutions.

As part of the processing of an application for authorisation as an electronic money institution, the CBI assesses the fitness and propriety of the institution’s board members and managing director pursuant to Article 26 of the Act on the Issuance and Handling of Electronic Money, cf. Act no. 161/2002 on Financial Undertakings (in icelandic).

As part of the processing of an application for authorisation as an electronic money institution, the CBI may be required to assess whether its shareholders are suitable to hold a qualifying holding pursuant to Article 14 of the Act on the Issuance and Handling of Electronic Money, cf. Chapter VI of the Act on Financial Undertakings.