Makseasutuste ja e-raha asutuste seadus (MERAS)

§ 1. Scope of regulation of Act

(1) This Act regulates the provision of payment services and e-money services, the activities and liability of payment institutions and e-money institutions and supervision over payment institutions and e-money institutions.

(2) The provisions of the Administrative Procedure Act apply to administrative proceedings prescribed in this Act, taking account of the specifications provided in this Act and the Financial Supervision Authority Act.

§ 2. Application of Act

(1) This Act applies to payment institutions and e-money institutions founded and operating in Estonia, branches of foreign payment institutions and foreign e-money institutions in Estonia and all other persons providing payment services or e-money services in Estonia.

(2) This Act also applies to the activities of Estonian payment institutions and e-money institutions and their branches in a foreign state, unless otherwise provided in the legislation of the foreign state.

(3) In addition to the provisions of this Act, a payment service provider complies with the requirements provided in Regulation (EU) 2023/1113 of the European Parliament and of the Council on information accompanying transfers of funds and certain crypto-assets and amending Directive (EU) 2015/849 (OJ L 150, 09.06.2023, pp 1–39).

(4) The provisions of Regulation (EU) 2023/1114 of the European Parliament and of the Council on markets in crypto-assets, and amending Regulations (EU) No 1093/2010 and (EU) No 1095/2010 and Directives 2013/36/EU and (EU) 2019/1937 (OJ L 150, 09.06.2023, pp 40–205), and the Crypto-Assets Market Act apply to an e-money institution that provides the crypto-asset service provided in Article 60(4) of that Regulation.

(5) Where this Act and the Crypto-Assets Market Act provide requirements for the same activity, the requirements that are more detailed or more stringent apply to a payment institution and an e-money institution.

§ 3. Payment services and payment service providers

(1) For the purposes of this Act, payment services are the following services provided by a person for the purposes of economic or professional activities:

1) services which enable to make cash payments to payment accounts and all acts required for the holding of payment accounts;

2) services which enable to withdraw cash from payment accounts and make all acts required for the holding of payment accounts;

3) execution of payment transactions, including transfer of funds to a payment account opened with a payment service provider;

4) execution of payment transactions where the funds have been granted as a loan to the client of a payment service provider;

5) issuing of payment instruments specified in subsection 8 of § 709 of the Law of Obligations Act, and acquiring of payment transactions;

6) money remittance;

7) payment initiation service;

8) account information service.

(2) The content of payment services specified in clauses 3 and 4 of subsection 1 of this section is:

1) execution of direct debits, including one-off direct debits, the purpose of which is debiting a payer’s payment account, where a payment transaction is initiated by the payee on the basis of the consent given by the payer directly to the payee, to the payee’s payment service provider or to the payer’s own payment service provider;

2) execution of payment transactions through a payment instrument;

3) execution of credit transfers the purpose of which is crediting a payee’s payment account with a payment transaction or a series of payment transactions from a payer’s payment account based on an instruction given by the latter, including execution of standing orders on a regular basis or on previously set dates based on an instruction given by the payer to their payment service provider.

(2¹) The payment service specified in clause 5 of subsection 1 of this section is at least one of the following services:

1) service of a payment service provider contracting with a payee to accept and process payment transactions, which result in a transfer of funds to the payee;

2) service of a payment service provider contracting to provide a payer with a payment instrument to initiate and process the payer's payment transactions.

(3) Money remittance specified in clause 6 of subsection 1 of this section is a payment service where funds are transferred from the payer to the payee or a payment service provider acting on behalf of the payee without opening a payment account in the name of the payer or payee.

(3¹) The payment initiation service specified in clause 7 of subsection 1 of this section is the initiation of a payment transaction following a request by the client on the payment account which has not been opened by the payment initiation service provider, but by another payment service provider. With regard to the provision of the payment initiation service, the payment service provider does not hold the funds of the payer at any time.

(3²) The account information service specified in clause 1 of subsection 8 of this section is the provision of consolidated information on one or more payment accounts that have not been opened with the account information service provider, but with another payment service provider.

(4) Payment system is a funds transfer system which operates on the basis of agreed and standardised rules and whereby payment transactions are processed and settled.

(5) The provisions of § 709 of the Law of Obligations Act apply to payers, payees and payment accounts.

(6) The following persons may provide payment services:

1) payment institutions for the purposes of this Act;

2) e-money institutions for the purposes of this Act;

3) credit institutions and branches thereof as within the meaning of point (1) of Article 4(1) and point (17) of Article 4(1) of the Regulation (EU) No 575/2013 of the European Parliament and of the Council on prudential requirements for credit institutions and amending Regulation (EU) No 648/2012 (OJ L 176, 27.06.2013, pp 1–337);

4) postal service providers providing financial services for the purposes of § 36 of the Postal Act;

5) the European Central Bank and central banks of states which are contracting parties to the EEA Agreement (hereinafter Contracting State) when not performing their duties as monetary authorities or other state agencies;

6) Contracting States or their regional or local authorities when not performing their duties as state agencies.

§ 5. Payment institution

(1) A payment institution is a company the permanent activity of which is the provision of payment services. A payment institution may operate only as a public limited company in the case it provides any of the payment services specified in clauses 1–5 of subsection 1 of § 3 of this Act. A payment institution is a financial institution for the purposes of § 5 of the Credit Institutions Act.

(2) In addition to the provision of payment services listed in § 3 of this Act, a payment institution may engage in the following services and activities:

1) provision of ancillary services closely related to payment services, such as ensuring the execution of payment transactions, foreign exchange services, safekeeping activities, and the storage and processing of data;

2) operation of payment systems;

3) other activities not related to the provision of payment services unless otherwise provided by law.

(3) Payment institutions may use the payment accounts held by them only for the execution of payment transactions. Funds received from a client of the payment institution for the provision of payment services are not deemed to be a deposit or other repayable funds for the purposes of § 4 of the Credit Institutions Act or e-money for the purposes of § 6 of this Act.

(4) Payment institutions may only grant loans relating to the provision of payment services specified in clauses 4 and 5 of subsection 1 of § 3 of this Act and provided that the following conditions are met:

1) grant of loans is an ancillary service and loans are granted only for the execution of a payment transaction;

2) loans relating to the execution of a payment transaction must be repaid within 12 months;

3) loans are not granted from the funds received or held for the purpose of executing a payment transaction;

4) own funds of the payment institution must be sufficient to cover the risks relating to the granted loans;

5) the activities of the payment institution comply with the provisions of §§ 38, 40 and 43, subsections 2 and 3 of § 44 and §§ 46–53 of the Creditors and Credit Intermediaries Act.

(5) The Financial Supervision Authority may determine the level of own funds sufficient to cover the risks relating to the loans granted by a payment institution pursuant to the provisions of subsection 4 of this section.

(6) Payment institutions must not be engaged in the receipt of deposits or other repayable funds for the purposes of § 4 of the Credit Institutions Act.

(7) A savings and loan association which provides payment services is a payment service provider for the purposes of this Act and the provisions of this Act and other legislation concerning payment service providers apply thereto, with the specifications provided in this Act and the Savings and Loan Associations Act. The provisions of the second sentence of subsection 1 of this section does not apply to savings and loan associations.

§ 6. E-money and issue thereof

(1) E-money is monetary value stored on an electronic medium (hereinafter e-money device) which expresses a monetary claim against the issuer and meets all the following conditions:

1) it is issued at par value of the amount of the monetary payment received;

2) it is used as a payment instrument to execute payment transactions for the purposes of subsection 6 of § 709 of the Law of Obligations Act;

3) it is accepted as a payment instrument by at least one person who is not the issuer of the same e-money.

(2) Interest or other fees must not be charged or paid, or other benefits granted for the period of holding e-money.

(3) The provisions of this Act concerning e-money and e-money institutions do not apply to payment instruments specified in clause 10 or payment transactions specified in clause 11 of subsection 1 of § 4 of this Act.

(4) For the purposes of this Act, e-money services include the issue of e-money and ancillary services closely related to the issue or administration of e-money.

(6) E-money is not deemed to be a deposit or other repayable funds for the purposes of § 4 of the Credit Institutions Act.

(7) The following persons may issue e-money (hereinafter e-money issuer):

1) e-money institutions for the purposes of this Act;

3) credit institutions for the purposes of the Credit Institutions Act;

4) the European Central Bank and central banks of Contracting States when not performing their duties as monetary authorities or other state agencies;

5) Contracting States or their regional or local authorities when performing their duties.

(8) E-money may be distributed or redeemed by the e-money issuer or a person acting on behalf of the e-money issuer (hereinafter distributor). Upon use of a distributor, the requirements for outsourcing of activities provided in § 62 of this Act apply to the e-money institution.

(9) Where an e-money institution provides payment services through a distributor, the provisions of §§ 59–61 of this Act concerning paying agents apply to the e-money institution.

§ 7. E-money institution

(1) An e-money institution is a public or private limited company the permanent activity of which is the issue of e-money in its name. An e-money institution may operate only as a public limited company in the case it provides the service specified in clause 1 or 2 of subsection 2 of this section. An e-money institution may operate as a private limited company only in the case it does not provide any of the payment services specified in clauses 1–5 of subsection 1 of § 3 of this Act.

(2) An e-money institution may, in addition to the issue of e-money, be engaged in the following:

1) provision of payment services;

2) grant of loans relating to the provision of payment services provided that the conditions provided in subsection 4 of § 5 of this Act are met;

3) provision of ancillary services closely related to the issue or administration of e-money or payment services;

4) operation of payment systems;

5) other activities not related to the issue of e-money unless otherwise provided by law.

(3) E-money institutions are prohibited to grant loans out of or secured by the funds received in exchange for e-money.

(4) Where an e-money institution provides payment services, the provisions of subsection 3 of § 5 of this Act apply with regard to such e-money institution.

§ 8. Protection of name

(1) Only payment institutions may use the word makseasutus [payment institution] or derivatives or foreign language equivalents thereof in their business names.

(2) Only e-money institutions may use the word combination e-raha asutus [e-money institution] or derivatives or foreign language equivalents thereof in their business names.

§ 9. Consolidation group, control relationship and close links

(1) For the purposes of this Act, a consolidation group is formed by:

1) a parent company with a subsidiary or subsidiaries;

2) a parent company with a subsidiary or subsidiaries and undertakings related to the parent company or the subsidiaries thereof within the meaning of the holding specified in clause 1 of subsection 4 of this section;

3) companies or other legal persons under a common management pursuant to the contract entered into or the provisions of the memorandum of association or the articles of association or whose majority of the membership of the managing or supervisory bodies is formed by the same persons until the consolidated annual report is approved.

(2) For the purposes of this Act, a parent company is a person who controls at least one company or other legal person (subsidiary) pursuant to § 10 of the Securities Market Act. For the purposes of this Act, subsidiaries of subsidiaries of parent companies are deemed to be subsidiaries of the same parent company.

(3) For the purposes of this Act, control relationship means the relationship between parent companies and subsidiaries provided in subsections 1 and 2 of this section.

(4) For the purposes of this Act, close links means a situation where at least two persons are linked:

1) by a holding where at least 20 per cent of the share or initial capital or votes determined by shares is held in a company or other legal person;

2) by a control relationship for the purposes of subsection 3 of this section.

(5) A situation in which two or more persons are permanently linked to one and the same person by a control relationship is also deemed to be a close link.

§ 10. Client

(1) For the purposes of this Act, a client of a payment institution is any person to whom payment services are provided directly by the payment institution or through an agent, and a person who has addressed a payment institution or an agent in order to receive payment services.

(2) For the purposes of this Act, a client of an e-money issuer is any person to whom e-money is issued or has been issued directly by the e-money issuer or through a distributor, and a person who has addressed an e-money issuer or a distributor in order to acquire e-money.

§ 11. Exemptions for payment service providers upon application of Act

(1) Based on a decision of the Financial Supervision Authority, the provisions of Chapters 3, 4, 6 and 8 of this Act do not apply to a payment institution which provides only the service specified in clause 6 of subsection 1 of § 3 of this Act, unless the average total amount of its payment transactions exceeds one million euros per month over the course of the preceding 12 months.

(2) Based on a decision of the Financial Supervision Authority, the provisions of Chapters 3, 4, 6 and 8 of this Act do not apply to a payment institution which provides any of the payment services specified in clauses 1–5 of subsection 1 of § 3 of this Act, provided that all the following conditions are met:

1) less than half of the income for the financial year is received from payment transactions;

2) the average total amount of payment transactions made over the course of the preceding 12 months does not exceed three million euros per month;

3) the payment institution does not provide the payment services specified in clauses 6–8 of subsection 1 of § 3 of this Act.

(3) Based on a decision of the Financial Supervision Authority, the provisions of Chapters 4, 6, 8 and 9 of this Act do not apply to a payment institution which provides only the service specified in clause 8 of subsection 1 of § 3 of this Act.

(4) The Financial Supervision Authority decides the application of the exemption specified in subsections 1–3 of this section in its decision on the grant of authorisation.

(5) The payment transactions specified in subsection 1 and clauses 1 and 2 of subsection 2 of this section include the payment transactions made by agents of payment institutions. Compliance with the limits determined in the specified provisions is assessed on the basis of the business plan upon application for authorisation.

(6) A payment institution which is subject to the exemption provided in subsection 1 or 2 of this section must not found a branch or provide cross-border services in another Contracting State pursuant to the provisions of Chapter 3 of this Act.

§ 12. Exemptions for e-money service providers upon application of Act

(1) Based on a decision of the Financial Supervision Authority, the provisions of Chapters 3, 4, 6 and 8 of this Act do not apply to an e-money institution which issues e-money that complies with the definition of low value payment instrument specified in subsection 1 of § 733¹² of the Law of Obligations Act provided that the average outstanding e-money does not exceed 500,000 euros calculated pursuant to subsection 2 of this section. The Financial Supervision Authority decides the application of the exemption specified in this subsection in its decision on the grant of authorisation.

(2) For the purposes of this Act, average outstanding e-money is deemed to be the average total amount of financial liabilities related to e-money in issue at the end of each calendar day within the preceding six calendar months. Average outstanding e-money is calculated on the first calendar day of each calendar month and applied for that calendar month.

(3) An e-money institution which is subject to the exemption provided in subsection 1 of this section must not found a branch or provide cross-border services in a Contracting State or distribute e-money through a distributor in another Contracting State pursuant to the provisions of Chapter 3 of this Act.

(4) An e-money institution which is subject to the exemption provided in subsection 1 of this section may provide payment services, provided that it complies with the conditions provided in subsection 1 or 2 of § 11 of this Act.

§ 14. Authorisation and identification code

(1) In order to operate as a payment institution or e-money institution, a company must hold a corresponding authorisation.

(3) An authorisation for the provision of payment services or an authorisation for the issue of e-money is granted to a company founded in Estonia or withdrawn by a decision of the Financial Supervision Authority.

(3¹) The application of the exemption specified in subsections 1–3 of § 11 and subsection 1 of § 12 of this Act (hereinafter exemption) is applied for in the application for an authorisation.

(3²) Where the conditions on the basis of which the exemption was applied are no longer met, the payment institution or e-money institution must immediately inform the Financial Supervision Authority thereof. Within 30 days of the submission of the notice, the payment institution and the e-money institution must:

1) apply for amendment of the decision on the grant of an authorisation and for termination of the application of the exemption, or

2) apply for withdrawal of the authorisation and terminate the provision of payment services and e-money services.

(3³) The provisions of §§ 15–19 and 23 of this Act concerning authorisations apply to the application specified in clause 1 of subsection 3² of this section and the adjudication thereof. Where the payment institution or e-money institution confirms in the application for termination of the application of the exemption that the documents and data submitted according to subsection 1³ or 1⁴ of § 15 of this Act are still correct, complete and not misleading, the documents and data must be re-submitted only upon the request of the Financial Supervision Authority.

(4) Authorisations for the provision of payment services and authorisations for the issue of e-money are granted for an unspecified time limit and are not transferable to other persons.

(5) Persons specified in clauses 2–6 of subsection 6 of § 3 of this Act are not required to apply for an authorisation for the provision of payment services.

(6) Persons specified in clauses 3–5 of subsection 7 of § 6 of this Act are not required to apply for an authorisation for the issue of e-money.

(7) Upon granting authorisation, the Financial Supervision Authority issues at the request of the payment institution or e-money institution the right to use an identification code and the identification code itself, which is a unique two-digit identifier in an international payment account number and which enables to identify the payment institution or the e-money institution upon execution of a payment order and automatic processing thereof.

§ 15. Application for authorisation

(1) In order to apply for an authorisation for the provision of payment services or an authorisation for the issue of e-money, the members of the management board entered in the memorandum of association or registry card of the company being founded or operating (hereinafter applicant) submit to the Financial Supervision Authority a written application (hereinafter application for authorisation) and the following documents and information:

1) a copy of the articles of association and in case of an operating company, a decision on amendment of the articles of association together with the amended text of the articles of association;

2) upon foundation of a company, a notarised copy of the memorandum of association or foundation resolution;

3) a document certifying the payment of share capital or the existence of initial capital;

4) an action plan which sets out in particular the planned payment services or e-money services;

5) a business plan which complies with the requirements of § 16 of this Act;

6) the opening balance sheet of the applicant and an overview of revenue and expenditure or, in the case of an operating company, the balance sheet and income statement as at the end of the month prior to submission of the application for an authorisation and the three preceding annual reports where they exist;

7) a description of the application of the general requirements for safekeeping and protection of the assets of clients provided in Chapter 9 of this Act;

8) the internal rules provided in § 50 of this Act and accounting policies and procedures or drafts thereof;

9) data on information and communication technology and other resources and systems required for the provision of the planned services and procedure for the use of information and communication technology services in accordance with Regulation (EU) No 2022/2554 of the European Parliament and of the Council on digital operational resilience for the financial sector and amending Regulations (EC) No 1060/2009, (EU) No 648/2012, (EU) No 600/2014, (EU) No 909/2014 and (EU) 2016/1011 (OJ L 333, 27.12.2022, pp 1–79);

10) a description of the internal control system and measures which would ensure performance of obligations in connection with preventing money laundering and terrorist financing and information on the payer upon transfer of funds;

11) a description of the organisational structure of the applicant including, where necessary, a description of the procedure for the use of agents and branches or for the outsourcing of services, and its participation in national or international payment systems;

12) a list of the shareholders or members of the applicant which sets out the name and the registry code or the personal identification code or, in the absence of a personal identification code, the date of birth of each shareholder or member, and information on the number of shares and votes to be acquired or owned by each shareholder or member;

13) information specified in § 40 of this Act on persons who own qualifying holdings in the applicant;

14) information on the managers of the applicant, including each person's given name and surname, personal identification code or date of birth in the absence of a personal identification code, residence, educational background, a complete list of places of employment and positions and, in the case of members of the management board, a description of their areas of responsibility, and documents certifying the managers' trustworthiness and conformity to the requirements of this Act, which the applicant deems necessary to submit;

15) information on companies in which the holding of the applicant or a manager thereof exceeds 20 per cent, which also sets out the amount of share capital, a list of the areas of activity and the size of the holding of the applicant or manager;

16) information on the auditor and internal auditor of the applicant, including their name, residence or registered office, personal identification code or, in the absence of a personal identification code, the date of birth or the registry code;

17) in the case of an operating company, documents certifying the amount of own funds together with the sworn auditor's report;

18) the assessment of Eesti Pank on the technical, financial and legal principles of the functioning of the payment system and the draft rules for the functioning of the system where the applicant wishes to engage in the operation of the payment system;

19) a description of the security policy;

20) the address of the applicant's head office or registered office;

21) a certificate concerning payment of the processing fee provided in subsection 2 of § 453 of the Financial Supervision Authority Act.

(1¹) The description of the security policy specified in clause 19 subsection 1 of this section contains:

1) a thorough assessment of the risks associated with the payment services provided and a description of the security check and risk mitigation techniques thereof, which have been implemented to provide sufficient protection for clients against identified risks, including fraud and the illegal use of sensitive and personal data;

2) an explanation on how the security check and risk mitigation techniques, including the security measures specified in subsection 1 of § 63⁵ of this Act are used to ensure high digital operational resilience in accordance with Chapter II of Regulation (EU) No 2022/2554 of the European Parliament and of the Council, particularly in data protection and technical security, including for information and communication systems used by the applicant or a third party to whom activities or operational functions related to the provision of payment services are outsourced.

(1²) An applicant applying for an authorisation for the provision of payment services specified in clause 7 or 8 of subsection 1 of § 3 of this Act submits together with the application a document certifying the existence of liability insurance specified in § 63⁷ of this Act or another comparable security. The provisions of clause 7 of subsection 1of this section do not apply to an applicant applying for an authorisation only for the provision of the service specified in clause 7 of subsection 1 of § 3 of this Act.

(1³) An applicant applying for the application of the exemption specified in subsection 1 or 2 of § 11 or subsection 1 of § 12 of this Act submits to the Financial Supervision Authority only the information and documents specified in clauses 1–5, 7, 8, 10, 11, 14, 16 and 19 of subsection 1 and in subsection 3 of this section.

(1⁴) An applicant applying for the application of the exemption specified in subsection 3 of § 11 of this Act submits to the Financial Supervision Authority only the information and documents specified in clauses 1–5, 8, 14, 16 and 19 of subsection 1 and in subsection 1² of this section as well as a description of the measures specified in subsection 3 of this section concerning internal rules and accounting policies and procedures.

(3) The applicant submits a description of the auditing arrangements and organisational administration concerning the documents provided in clauses 7, 8, 10 and 11 of subsection 1 of this section and the completion of the documents which have been established by the applicant in order to take all necessary measures to protect the legitimate interests of its clients and ensure continuity and reliability in the performance of payment services.

(4) The specific requirements for the information and documents specified in subsections 1–1⁴ of this section may be established by a regulation of the minister in charge of the policy sector.

§ 16. Business plan

(1) A business plan must include a description of the character of the planned business activities, organisational structure, internal control system and management structure of the applicant, a description of the rights, obligations and liability of the persons related to the provision of planned services, as well as a description, forecast and analysis of the following factors:

1) the amount of revenue and expenditure by area of activity;

2) obligations related to the provision of payment services or e-money services;

3) the size of the assets and share capital of the applicant;

4) the level of the technical administration of the activities of the applicant;

5) strategy and market share in which the applicant proposes to engage in activities;

6) the planned activities, provided services and offered products, the potential agents or distributors, and clients and competitors;

7) plans regarding annual balance sheets and financial indicators which, among other things, set out revenue, expenditure, profit and cash flows, and the presumptions which constitute the basis thereof;

8) general principles and strategy of risk management;

9) investment policy;

10) any other material circumstances.

(2) A business plan is submitted for at least three years.

(3) The Financial Supervision Authority has the right to demand amendment of a business plan, provided that in the opinion of the Financial Supervision Authority:

1) the financial indicators and other information presented in the business plan are not reliable and the minimum amount of own funds which is calculated taking account of the obligations planned in the business plan does not comply with the requirements established by legislation for the payment institution or e-money institution;

2) it is not possible to ascertain on the basis of the business plan the applicant's ability to implement appropriate and proportionate systems, funds and procedures for reliable operation.

§ 17. Review of applications for authorisation

(1) Where an applicant has failed to submit all the information and documents specified in § 15 of this Act, or where such information or documents are inaccurate, misleading, with significant deficiencies or incomplete or have not been prepared in accordance with the requirements, the Financial Supervision Authority has the right to refuse to review the application or demand elimination of the deficiencies by the applicant.

(1¹) Where amendments are made to the information or documents specified in § 15 of this Act during the processing of an application for an authorisation, the applicant for the authorisation submits immediately such information and documents to the Financial Supervision Authority in an updated form. Where an amendment is substantial, the Financial Supervision Authority may deem the moment of receipt of this substantial amendment to be the beginning of the time limit of proceedings. In this case, the Financial Supervision Authority must notify the applicant of the new time limit of proceedings.

(2) The Financial Supervision Authority may demand the submission of additional information and documents where it is not convinced on the basis of the information and documents specified in § 15 of this Act as to whether the applicant for an authorisation has adequate facilities for the provision of payment services or e-money services or whether it meets the requirements for payment institutions or e-money institutions established by this Act or legislation issued on the basis thereof or where other circumstances relating to the applicant need to be verified.

(3) In order to verify the information submitted by an applicant, the Financial Supervision Authority may perform on-site inspections, order an assessment or special audit, receive information from state agencies and local authorities, consult state databases, obtain oral explanations from the applicant's managers and auditors, their representatives and, where necessary, third parties concerning the content of documents and facts which are relevant in making a decision on the grant of an authorisation.

(4) The information and documents specified in subsections 1–3 of this section are submitted to the Financial Supervision Authority within a reasonable time limit determined by the Financial Supervision Authority.

(5) The Financial Supervision Authority may refuse to review an application for an authorisation where the applicant has failed to eliminate the deficiencies specified in subsection 1 of this section within the prescribed time limit or has not submitted the information or documents requested by the Financial Supervision Authority by the end of the time limit or the submitted application has significant deficiencies.

(6) Upon processing of an application for an authorisation, the Financial Supervision Authority co-operates with the financial supervision authority of the respective Contracting State in the case:

1) the applicant is a parent undertaking or subsidiary of a payment institution, e-money institution, management company, investment fund, investment firm, credit institution, insurance undertaking or other person subject to financial supervision established in a Contracting State;

2) the subsidiary of the parent undertaking of the applicant is a payment institution, e-money institution, management company, investment fund, investment firm, credit institution or insurance undertaking or other person subject to financial supervision established in a Contracting State;

3) the applicant and a payment institution, e-money institution, management company, investment fund, investment firm, credit institution or insurance undertaking or other person subject to financial supervision established in a Contracting State are companies controlled by the same person.

§ 18. Decision on grant of authorisation

(1) The Financial Supervision Authority makes a decision to grant or refuse to grant an authorisation within three months after receipt of all the necessary documents and information which comply with the requirements, but not later than within six months after receipt of the application for the authorisation.

(2) Before making a decision to grant or refuse to grant an authorisation, the Financial Supervision Authority consults with Eesti Pank, where necessary.

(3) Upon grant of an authorisation, the Financial Supervision Authority may:

1) establish more favourable secondary conditions to the applicant which, where it is justified, permit the applicant to derogate from the circumstances on the basis of which the authorisation has been granted;

2) extend the time limit provided in subsection 1 of this section in the course of which the applicant must bring itself into conformity with the requirements on the basis of which the authorisation has been granted.

(4) Where it is evident from the submitted documents and information that the provision of services not related to payment services prevent sufficient supervision over the payment institution or e-money institution or that the risks related to the services planned in the business plan of the applicant are not sufficiently covered and the organisational structure and management structure of the applicant are not sufficient for operating as a payment institution or e-money institution with continuity and its internal procedures and internal control do not ensure sufficient risk management, the Financial Supervision Authority may, in addition to the provisions of subsection 3 of this section, set out secondary conditions to the applicant upon grant of an authorisation in order to protect the interests of the clients, which:

1) restrict the provision of payment services or e-money services or ancillary services related thereto;

2) require the foundation of a separate subsidiary for the provision of non-payment services which are provided at the same time as payment services.

(5) A decision regarding an authorisation sets out at least:

1) the name and registry code of the person with regard to whom the decision is made;

2) the type or types of services with regard to which the decision is made;

2¹) the application of an exemption upon satisfaction of an application for exemption;

3) the date of making and entry into force of the decision.

(6) The Financial Supervision Authority delivers a decision to grant or refuse to grant an authorisation immediately to the applicant.

§ 19. Bases for refusal to grant authorisation

(1) The Financial Supervision Authority has the right to refuse to grant an authorisation to an applicant where:

1) the applicant does not meet the requirements for payment institutions or e-money institutions provided in this Act or legislation issued on the basis thereof;

2) the resources for full payment of the share capital of a company being founded are not proved;

3) the applicant does not have the necessary funds or experience to operate as a payment institution or e-money institution with continuity;

4) the minimum amount of own funds of the applicant, which is calculated taking account of the obligations planned in the business plan provided in § 16 of this Act, does not comply with the requirements established by legislation regarding payment institutions or e-money institutions;

5) the managers, auditor, shareholders or members of the applicant do not meet the requirements provided in this Act or legislation issued on the basis thereof;

6) close links between the applicant and another person prevent sufficient supervision over the applicant, or the requirements arising from legislation or the implementation of legislation of the other state where the person with whom the applicant has close links is established prevent sufficient supervision over the applicant;

7) the information submitted by the applicant indicates that the applicant mainly plans to operate in another Contracting State;

8) the internal rules provided in § 50 of this Act are not sufficiently accurate or unambiguous for regulation of the activities of the payment institution or e-money institution;

9) the applicant or its manager has been punished for an economic offence, official misconduct, offence against property or offence against public trust or financing and support of act of terrorism or activities directed at it, or the corresponding information concerning the punishment has not been deleted from the criminal records database pursuant to the Criminal Records Database Act.

(2) Among other things, the following is considered upon assessment of that provided in clause 3 of subsection 1 of this section:

1) the level of the organisational and technical administration of the applicant's activities;

2) the educational background of the persons connected with the management of the applicant, their work experience, business connections, trustworthiness and reputation;

3) the adequacy and sufficiency of the business plan provided in § 16 of this Act;

4) the activities, financial situation, reputation and experience of the applicant, its parent company and persons belonging to the same consolidation group as the applicant.

(3) Where an applicant has submitted an application for the application of the exemption specified in subsection 1 or 2 of § 11 or subsection 1 of § 12 of this Act, the Financial Supervision Authority has the right to refuse to grant an authorisation to the applicant in the events provided in subsection 1 of this section provided that the application of the exemption entails material risk for damaging the interests of clients, currency circulation, functioning of the money markets or stability or reliability of the payment system.

§ 21. Expiry of authorisation

An authorisation expires where:

1) in the event of voluntary dissolution of the payment institution or e-money institution, upon the receipt of authorisation for the dissolution of the payment institution or e-money institution from the Financial Supervision Authority;

2) the authorisation is withdrawn;

3) payment institutions or e-money institutions are merged, in the case of an institution being acquired;

4) a new payment institution or e-money institution is founded by merger, in the case of institutions that are merging;

5) the payment institution or e-money institution is declared bankrupt.

§ 22. Withdrawal of authorisation and revocation of identification code

(1) Withdrawal of an authorisation means deprivation of a right granted by the authorisation.

(2) The Financial Supervision Authority may withdraw an authorisation where:

1) the payment institution or e-money institution fails to commence activities within 12 months as of the grant of the authorisation or where an act by the founders of the payment institution or e-money institution indicates that the payment institution or e-money institution will be unable to commence activities within the specified time limit or the activities of the payment institution or e-money institution are suspended for more than six consecutive months;

2) the payment institution or e-money institution has submitted false information upon application for the authorisation which was of significant importance in making the decision to grant the authorisation, and also in other cases where false information has been submitted to the Financial Supervision Authority by or for the payment institution or e-money institution;

3) the payment institution or e-money institution does not meet the requirements in force with regard to the grant of authorisations;

3¹) the payment institution or e-money institution fails to comply with the conditions provided in subsection 3² of § 14 of this Act;

3²) it is refused to amend the decision to grant an authorisation and to terminate the application of an exemption on the basis of an application specified in clause 1 of subsection 3² of § 14 of this Act;

4) the circumstances provided in clause 5 of subsection 1 of § 19 of this Act become evident;

5) the payment institution or e-money institution has repeatedly or significantly violated the provisions of legislation regulating its activities;

6) the payment institution or e-money institution or its manager has been punished for an economic offence, official misconduct, offence against property or offence against public trust or financing and support of act of terrorism or activities directed at it, or the corresponding information concerning the punishment has not been deleted from the criminal records database pursuant to the Criminal Records Database Act;

7) the payment institution or e-money institution fails to comply with the secondary conditions specified in subsection 4 of § 18 of this Act;

8) the payment institution or e-money institution has published materially incorrect or misleading information or advertising concerning its activities or managers;

9) the payment institution or e-money institution is unable to perform the obligations it has assumed or where, for any other reason, its activities significantly damage the interests of clients, currency circulation, functioning of the money markets or stability or reliability of the payment system;

10) the amount of own funds of the payment institution or e-money institution does not meet the requirements provided in this Act or legislation established on the basis thereof;

10¹) the payment institution providing the payment service specified in clauses 7 or 8 of subsection 1 of § 3 of this Act does not have liability insurance or a guarantee contract in compliance with § 63⁷ of this Act;

11) the payment institution or e-money institution belongs to a consolidation group the structure of which prevents the receipt of information necessary for supervision on a consolidated basis, or where a company which belongs to the same consolidation group as the payment institution or e-money institution operates on the basis of legislation of a foreign state, which prevents the exercise of sufficient supervision;

12) close links between the payment institution or e-money institution and other persons prevent the exercise of sufficient supervision;

13) the payment institution or e-money institution has committed money laundering or financed or supported an act of terrorism or violates the procedure for preventing money laundering and terrorist financing established by legislation;

14) it becomes evident that the payment institution or e-money institution has chosen Estonia as the place for application for an authorisation and registration in order to evade compliance with stricter requirements established for payment institutions or e-money institutions in another Contracting State where the payment institution or e-money institution mainly operates;

15) according to the information submitted to the Financial Supervision Authority by the financial supervision authority of a Contracting State or a third country, the payment institution or e-money institution has violated the conditions provided in the legislation of the Contracting State or the third country or established by the financial supervision authority of the Contracting State or the third country;

16) the payment institution or e-money institution has failed to implement a precept of the Financial Supervision Authority within the time limit or to the extent prescribed.

(3) Prior to deciding on the withdrawal of an authorisation on the basis specified in subsection 2 of this section, the Financial Supervision Authority may issue a precept to the payment institution or e-money institution and set a time limit for elimination of the deficiencies which are the reasons for the withdrawal.

(4) An authorisation is withdrawn on the basis of an application of a payment institution or e-money institution where the payment institution or e-money institution no longer wishes to provide the services specified in subsection 1 of § 3 or clause 1 of subsection 3 of § 6 of this Act.

(5) The Financial Supervision Authority may refuse to withdraw an authorisation on the basis of an application specified in subsection 4 of this section where there is good reason to believe that withdrawal of the authorisation may damage the legitimate interests of the clients or other creditors of the payment institution or e-money institution.

(6) An application specified in subsection 4 of this section is reviewed by the Financial Supervision Authority and a decision to withdraw or refuse to withdraw the authorisation is made within two months as of the receipt of the application.

(7) The decision on withdrawal of an authorisation is immediately delivered to the addressee of the decision.

(8) The Financial Supervision Authority revokes an identification code specified in subsection 7 of § 14 of this Act and the right to use thereof upon withdrawal or expiry of the authorisation or for any other good reason.

§ 23. Informing the public

(1) The Financial Supervision Authority publishes a decision to grant, amend or withdraw an authorisation and to grant and withdraw the authorisations provided in §§ 25 and 32 of this Act on its website not later than on the working day following the day of entry into force of the decision.

(2) In addition to the provisions of subsection 1 of this section, the Financial Supervision Authority publishes a decision to withdraw an authorisation which is made on the basis of § 22 of this Act in at least one national media outlet.

§ 24. Operation of payment institution and e-money institution in foreign state

(1) A payment institution or e-money institution founded in Estonia and holding an authorisation may provide the service specified in subsection 1 of § 3 or subsection 4 of § 6 of this Act in a foreign state by establishing branches or providing cross-border services, including through an agent or distributor (hereinafter jointly in this Chapter agent).

(2) The provisions of § 29 of this Act apply to the provision of services by Estonian payment institutions and e-money institutions in another Contracting State.

(3) The provisions of §§ 25–28 of this Act apply to the foundation of a branch by an Estonian payment institution or e-money institution in a foreign state not specified in subsection 2 of this section (hereinafter third country).

(4) A cross-border service means the service which is provided by a payment institution or e-money institution in a state where the institution or its branch is not registered.

(4¹) A payment institution or e-money institution must apply for an authorisation from the Financial Supervision Authority for cross-border provision of services in a third country. In order to apply for an authorisation, a payment institution or e-money institution submits to the Financial Supervision Authority a written application and the information and documents specified in clauses 1 and 2 of subsection 1 of § 29 of this Act. The provisions of subsections 1 and 3 of § 25 and §§ 26–28 concerning the foundation of a branch apply to the application, processing, granting and withdrawal of an authorisation, whereas the provisions of clauses 3 and 4 of § 27 concerning a business plan apply to an action plan.

(5) Upon provision of services in a foreign state, a payment institution or e-money institution must comply with the requirements provided in this Act, legislation issued on the basis thereof and legislation of the foreign state.

§ 25. Branch of payment institution and e-money institution in third country

(1) A payment institution or e-money institution wishing to found a branch in a third country applies for a respective authorisation (hereinafter in this Chapter authorisation for foundation of a branch) from the Financial Supervision Authority.

(2) In order to apply for an authorisation for the foundation of a branch in a third country, a payment institution or e-money institution submits a written application (hereinafter in this Chapter application) and the following information and documents to the Financial Supervision Authority:

1) the name of the third country in which the branch is to be founded;

2) the address of the registered office of the branch in the third country;

3) a business plan for the activities of the branch in the third country, which complies with the requirements provided in § 16 of this Act;

4) information specified in clause 14 of subsection 1 of § 15 of this Act concerning the managers of the branch.

(3) The information and documents specified in subsection 2 of this section are submitted in Estonian. At the request of the Financial Supervision Authority, the information and documents are submitted together with a translation made by a sworn translator into the official language or one of the official languages of the third country where the payment institution or e-money institution wishes to found a branch.

§ 26. Processing of applications for authorisation for foundation of branch and decision on grant of authorisation

(1) The provisions of § 17 of this Act apply to the processing of applications for an authorisation for the foundation of a branch and verification of the submitted information and the financial situation, organisational structure and technical systems of the applicant and existence of sufficient funds for the foundation of a branch.

(2) The Financial Supervision Authority makes a decision to grant or refuse to grant an authorisation for the foundation of a branch within two months after receipt of all the necessary information and documents, but not later than within three months after receipt of the respective application.

(3) The Financial Supervision Authority immediately informs the payment institution or e-money institution of a decision to grant or refuse to grant an authorisation for the foundation of a branch.

§ 27. Bases for refusal to grant authorisation for foundation of branch

The Financial Supervision Authority may refuse to grant an authorisation for the foundation of a branch where:

1) the managers of the branch do not meet the requirements for managers of payment institutions or e-money institutions provided in this Act;

2) the information or documents submitted upon application for an authorisation for the foundation of a branch do not meet the requirements provided in this Act or legislation established on the basis thereof, or are incorrect, misleading or incomplete;

3) the financial situation, organisational structure and other resources of the payment institution or e-money institution are insufficient for the provision of services specified in the business plan in third countries;

4) the foundation of the branch in a third country or implementation of the business plan submitted by the payment institution or e-money institution may damage the payment institution or e-money institution, the interests of the shareholders of the payment institution or e-money institution, the financial situation of the payment institution or e-money institution or adversely affect the reliability of its activities in Estonia, in another Contracting State or in a third country;

5) a financial supervision authority of a third country has no legal basis or possibilities for co-operation with the Financial Supervision Authority due to which the Financial Supervision Authority cannot exercise sufficient supervision over the branch founded in the third country.

§ 28. Withdrawal of authorisation for foundation of branch

(1) The Financial Supervision Authority may withdraw an authorisation for the foundation of a branch in a third county where:

1) the payment institution or e-money institution has submitted false information upon application for the authorisation for foundation of a branch which was of significant importance in making the decision to grant the authorisation, and also in other cases where false information has been submitted to the Financial Supervision Authority by or for the payment institution or e-money institution;

2) the payment institution or e-money institution has significantly violated the requirements of the legislation of the relevant third country and it may damage the interests of the clients of the payment institution or e-money institution;

3) the payment institution or e-money institution or its branch does not comply with the requirements in force with regard to the grant of authorisations for the foundation of a branch;

4) the payment institution or e-money institution fails to submit reports on its branch as required;

5) the manager of the payment institution or e-money institution or its branch has been punished for an economic offence, official misconduct, offence against property or offence against public trust or financing and support of act of terrorism or activities directed at it, or the information concerning the punishment has not been deleted from the criminal records database pursuant to the Criminal Records Database Act;

6) the payment institution or e-money institution has failed to implement a precept of the Financial Supervision Authority within the time limit or to the extent prescribed;

7) the risks arising from the activities of the branch are significantly greater than risks arising from the activities of the payment institution or e-money institution;

8) the authorisation of the payment institution or e-money institution has been withdrawn;

9) the circumstances provided in § 27 of this Act become evident.

(2) The Financial Supervision Authority immediately informs the payment institution or e-money institution and the financial supervision authority of a third country of a decision to withdraw an authorisation for the foundation of a branch.

(3) After becoming aware of the withdrawal of an authorisation for the foundation of a branch, the payment institution or e-money institution terminates the provision of its services through the branch founded in the third country not later than by the due date specified by the Financial Supervision Authority.

§ 29. Foundation of branches in other Contracting States and cross-border provision of services

(1) A payment institution or e-money institution wishing to found a branch in another Contracting State or provide cross-border services in another Contracting State submits an application and the following information and documents to the Financial Supervision Authority:

1) the name of the Contracting State where the branch is intended to be founded or the service is intended to be provided (hereinafter state of destination);

2) an action plan which contains data on all the services provided in a state of destination and the notice specified in subsection 1 of § 62 of this Act where the founding of the branch or the cross-border provision of services involves the outsourcing of activities or operational functions to third parties;

3) upon the use of agents, information specified in subsection 2 of § 59 of this Act;

4) in the case a branch is founded, the address of the registered office thereof in the state of destination, description of the organisational structure of the branch and the names and personal identification codes or, in the absence of personal identification codes, the dates of birth, and residences of the persons responsible for the management of the branch;

5) in the case a branch is founded, a business plan for the activities of the branch in the Contracting State which complies with the requirements provided in § 16 of this Act, internal rules of the branch and the accounting policies and procedures to be applied in the branch which comply with § 50 of this Act, except for clauses 9–13 of subsection 3 of § 50 of this Act.

(2) The information and documents specified in subsections 1, 10 and 11 of this section are submitted in Estonian. At the request of the Financial Supervision Authority, the information and documents are submitted together with a translation made by a sworn translator into the official language or one of the official languages of the Contracting State where the payment institution or e-money institution wishes to found a branch.

(3) The Financial Supervision Authority is required to do the following within one month of the receipt of all requested information and documents:

1) forward the information and documents specified in subsection 1 of this section to a financial supervision authority of a state of destination pursuant to the procedure provided in the European Commission Implementing Regulation specified in Article 28(5) of Directive 2015/2366/EU of the European Parliament and of the Council on payment services in the internal market, amending Directives 2002/65/EC, 2009/110/EC and 2013/36/EU and Regulation (EU) No 1093/2010, and repealing Directive 2007/64/EC (OJ L 337, 23.12.2015, pp 35–127) or

2) make a decision to refuse to forward the information and documents.

(4) The Financial Supervision Authority immediately informs the payment institution or e-money institution of a decision to forward the information and documents or refuse to forward the information and documents.

(5) The Financial Supervision Authority may make a decision to refuse to forward the information and documents specified in subsection 1 of this section, provided that at least one of the following circumstances exists:

1) the financial situation, organisational structure or other resources of the payment institution or e-money institution are insufficient for the provision of services specified in the action plan in a state of destination;

2) the foundation of the branch or implementation of the action plan submitted by the payment institution or e-money institution may damage the interests of its clients, the financial situation of the payment institution or e-money institution or adversely affect the reliability of its activities;

3) the information or documents submitted for forwarding are incorrect, misleading or fail to comply with the requirements provided in this Act;

4) the founding of a branch, use of an agent or implementation of the action plan submitted by a payment institution or e-money institution may be related to money laundering or terrorist financing or an attempt thereof or increases such risks.

(6) After the receipt of an assessment by a financial supervision authority of a state of destination regarding the documents and information specified in subsection 1 of this section and no later than three months after the receipt of such documents and information, the Financial Supervision Authority:

1) enters the branch or the agent in the list specified in § 105 of this Act or approves the provision of services in the state of destination in another manner;

2) makes a decision by which it refuses to perform the act specified in subsection 1 of this section or to grant approval where the assessment of the financial supervision authority of the state of destination refers to the existence of some of the circumstances specified in subsection 5 of this section.

(7) The Financial Supervision Authority immediately informs a payment institution or e-money institution and a financial supervision authority of a state of destination of the making of the decision, performing of the act and granting of approval specified in subsection 6 of this section. Where the decision of the Financial Supervision Authority deviates from the assessment of a financial supervision authority of a state of destination regarding the documents and information specified in subsection 1 of this section, the Financial Supervision Authority submits reasons for the deviation to the financial supervision authority of the state of destination.

(8) An agent or a branch may provide services in a state of destination after being entered in the list specified in § 105 of this Act. Otherwise, an Estonian payment institution or e-money institution may provide services in a state of destination after the notification of a financial supervision authority of the state of destination of the granting of approval specified in clause 1 of subsection 6 of this section.

(9) Before commencing operation a payment institution or e-money institution informs the Financial Supervision Authority of a date on which an agent or a branch commences the provision of services in the state of destination. The Financial Supervision Authority immediately informs a financial supervision authority of the state of destination of such a date.

(10) A payment institution or e-money institution immediately informs the Financial Supervision Authority of changes in the information or documents specified in subsection 1 of this section, where possible, at least one month before entry into force of the changes. The Financial Supervision Authority informs the financial supervision authority of the state of destination of the changes.

(11) A payment institution or e-money institution submits an application to the Financial Supervision Authority for founding a new branch or introducing a new agent, and submit appropriate updates to the documents and information specified in subsection 1 of this section. The provisions of subsections 3–9 of this section apply to the adjudication of the application and the commencement of services by a new agent or branch.

§ 31. Operation of foreign payment institution and e-money institution in Estonia

(1) A person who, according to the legislation of the home state, may provide the service specified in subsection 1 of § 3 or clause 1 of subsection 3 of § 6 of this Act, may provide the same service in Estonia on the basis of an authorisation granted in the home state by founding branches or providing cross-border services in Estonia, including through an agent. For the purposes of this Act, a home state is a state where the corresponding person is founded.

(2) The provisions of § 35 of this Act apply to the person specified in subsection 1 of this section which has been founded in another Contracting State and complies with the requirements established for payment institutions or e-money institutions in Directive 2015/2366/EU of the European Parliament and of the Council or Directive 2009/110/EC of the European Parliament and of the Council on the taking up, pursuit and prudential supervision of the business of electronic money institutions amending Directives 2005/60/EC and 2006/48/EC and repealing Directive 2000/46/EC (OJ L 267, 10.10.2009, pp 7–17).

(3) The provisions of §§ 32–34 of this Act apply to a person specified in subsection 1 of this section which does not comply with the requirements provided in subsection 2 of this section (hereinafter payment institution or e-money institution of a third country).

(4) For the purposes of this section, cross-border services are services provided in Estonia by a person who is not or whose branch is not registered in Estonia. The provisions of § 35 of this Act concerning cross-border services apply also in the case cross-border services are provided through an agent operating in Estonia.

(5) Upon provision of payment services or e-money services in Estonia, a person of a foreign state must comply with the requirements established with regard to its activities by this Act and on the basis thereof and with other requirements for operating in Estonia arising from Estonian legislation.

§ 32. Branch of payment institution and e-money institution of third country in Estonia and provision of cross-border services in Estonia

(1) In order to found a branch or provide cross-border services in Estonia, a payment institution or e-money institution of a third country is required to apply for an authorisation (hereinafter in this section and §§ 33 and 34 authorisation) from the Financial Supervision Authority.

(2) Upon application for an authorisation, a written application and the following information and documents are submitted to the Financial Supervision Authority:

1) the name and address of the payment institution or e-money institution;

2) information provided in clause 14 of subsection 1 of § 15 of this Act on the managers of the payment institution or e-money institution and, in the case of foundation of a branch, on the managers of the branch;

3) information and documents provided in § 40 of this Act relating to shareholders who have qualifying holdings in the payment institution or e-money institution;

4) the scope of the authorisation granted to the payment institution or e-money institution and information concerning the agency which granted the authorisation;

5) in the case of foundation of a branch, the business name and address of the branch;

6) the information and documents specified in clauses 1, 3 and 5 of subsection 2 of § 386 of the Commercial Code;

6¹) a copy of the articles of association or partnership agreement of the company, certified according to the laws of the country of the registered office, where the articles of association or partnership agreement must be submitted to a register also in the country of the registered office of the company;

7) the two preceding annual reports, where they exist.

8) the business plan which meets the conditions provided in § 16 of this Act and sets out all services provided by the payment institution or e-money institution in Estonia;

9) the personal data of the agent, where the agent exists.

(3) In addition to the information specified in subsection 2 of this section, a payment institution or e-money institution of a third country must submit the following to the Financial Supervision Authority:

1) the permission of the financial supervision authority of the home state to found a branch or provide cross-border services in Estonia;

2) the confirmation of the financial supervision authority of the home state to the effect that the payment institution or e-money institution holds a valid authorisation in its home state and that it pursues its activities in a correct manner and in accordance with good practices;

3) information on the financial situation of the payment institution or e-money institution, including the size of own funds and the description of the consumer protection scheme applied with regard to the clients of the payment institution or e-money institution in the home state.

(4) The information and documents specified in this section which are in a foreign language are submitted together with a translation into Estonian made by a sworn translator. With the consent of the Financial Supervision Authority, the specified information and documents may be submitted in another language.

§ 33. Processing of application for authorisation and withdrawal of authorisation

(1) The provisions of subsection 7 of § 14 and §§ 17–19 and 22–23 of this Act apply to the processing of applications for an authorisation and verification of information and to the grant and withdrawal of authorisations and grant and revocation of identification codes of branches and the right to use thereof unless otherwise provided in this section.

(2) In addition to the bases provided in § 19 of this Act, the Financial Supervision Authority may refuse to grant an authorisation in the case the financial supervision authority of a third country does not guarantee adequate supervision of the applicant or the financial supervision authority of a third country has no legal basis or possibilities for co-operation with the Financial Supervision Authority.

(3) The Financial Supervision Authority may withdraw an authorisation in the case circumstances provided in § 19 of this Act or in subsection 2 of this section become evident.

(4) The Financial Supervision Authority may refuse to revoke an authorisation in the case the clients of the payment institution or e-money institution have claims against the branch or the payment institution or e-money institution of a third country or the revocation of the authorisation damages the payment institution or e-money institution or the interests of its shareholder or clients.

§ 34. Amendment of authorisation

(1) A payment institution or e-money institution of a third country wishing to provide services in Estonia which are not specified in the business plan submitted upon application for an authorisation submits an application for the amendment of the authorisation to the Financial Supervision Authority.

(2) In order to amend an authorisation, a payment institution or e-money institution of a third country submits to the Financial Supervision Authority the information and documents specified in clauses 1–5 and 8 of subsection 2 of § 32 of this Act.

(3) The provisions of §§ 17–19 of this Act apply to the processing of applications for the amendment of authorisations for the foundation of a branch, verification of information and deciding on amendment of the authorisations.

§ 35. Foundation of branch of payment institution and e-money institution of another Contracting State in Estonia and provision of cross-border services in Estonia

(1) A payment institution or e-money institution of a Contracting State wishing to found a branch in Estonia or provide cross-border services informs the financial supervision authority of its home state of its wish. According to the law of the home state, the information and documents specified in Article 28(1) of Directive 2015/2366/EU of the European Parliament and of the Council are submitted together with the notice.

(2) The Financial Supervision Authority has the right to demand that a payment institution of a Contracting State submit to it a translation into Estonian made by a sworn translator of the information and documents specified in subsections 1, 7 and 8 of this section which are in a foreign language.

(3) Where a financial supervision authority of the home state forwards to the Financial Supervision Authority the information and documents specified in subsection 1 of this section, the Financial Supervision Authority informs the financial supervision authority of the home state of receipt thereof.

(4) The Financial Supervision Authority submits to a financial supervision authority of the home state its reasoned assessment concerning the following circumstances within one month of the receipt of the documents and information specified in subsection 1 of this section:

1) whether the founding of a branch, use of an agent or the provision of cross-border services may be related to money laundering or terrorist financing or an attempt thereof or increase such risks;

2) whether there is any other reason to restrict or prohibit the founding of a branch of or the provision of services by a payment institution or e-money institution of a Contracting State.

(5) An agent or branch of a payment institution or e-money institution of a Contracting State may provide services in Estonia after being entered in a relevant register of its home state which complies with the requirements provided in Article 14 of Directive 2015/2366/EU of the European Parliament and of the Council. Otherwise, a payment institution or e-money institution of a Contracting State may provide services in Estonia provided that a financial supervision authority of its home state informs the Financial Supervision Authority after the receipt of the assessment specified in subsection 4 of this section that cross-border services are not prohibited or restricted.

(6) Before commencing operation, the payment institution or e-money institution of a Contracting State informs the Financial Supervision Authority through a financial supervision authority of its home state the date when the agent or branch commences the provision of services in Estonia.

(7) A payment institution or e-money institution immediately informs the Financial Supervision Authority through a financial supervision authority of its home state of changes to the information or documents specified in subsection 1 of this section. Where possible, changes are communicated at least one month before the implementation thereof.

(8) In order to start using a new agent in Estonia, a payment institution or e-money institution of a Member State submits to a financial supervision authority of its home state the documents and information required under the law of the home state. The provisions of subsections 3–6 of this section apply to the commencement of the provision of services in Estonia by a new agent and to the preceding acts by the Financial Supervision Authority.

(9) Under the conditions provided in the European Commission Implementing Regulation adopted on the basis of Article 29(5) and (7) of Directive 2015/2366/EU of the European Parliament and of the Council, the Financial Supervision Authority may issue a precept obliging a payment institution or e-money institution of a Contracting State using agents to provide services in Estonia to appoint a contact person in Estonia tasked with providing information on the compliance with requirements for services.

(10) Based on an application of a payment institution or e-money institution of a Contracting State, the Financial Supervision Authority grants an identification code and the right to use thereof specified in subsection 7 of § 14 of this Act to a branch as of the date specified in subsection 6 of this section. Where the period between the receipt of the application and the date specified in subsection 6 of this section is less than 30 calendar days, the Financial Supervision Authority may decide on the grant of an identification code and the right to use thereof within 30 calendar days from the receipt of the corresponding application.

§ 37. Qualifying holding

(1) For the purposes of this Act, a qualifying holding means any direct or indirect holding in the share capital of a payment institution or e-money institution which represents at least 10 per cent of the share capital of the company, of all rights related thereto or of the voting rights in the company or which makes it possible to exercise a significant influence over the managing bodies of the company.

(2) Holding is direct where a person holds or exercises it personally.

(3) Holding is indirect where:

1) a person holds or exercises it together with one or several controlled companies;

2) it is held or exercised by one or several companies controlled by a person;

3) it is held or exercised by a person or a company controlled by the person upon agreement with a third party;

4) the voting rights arising therefrom are deemed to belong to a person.

(4) The provisions of this Chapter concerning the share capital and shares of public limited companies also apply to the share capital and shares of private limited companies.

(5) The provisions of §§ 37–45 of this Act also apply to a commercial association.

§ 38. Requirements for persons having qualifying holding

Qualifying holdings in a payment institution or e-money institution may be acquired, held and increased and control over a payment institution or e-money institution may be gained, held and increased by anyone (hereinafter in this Chapter person):

1) who has impeccable business reputation and whose activities in connection with the acquisition comply with the principles of sound and prudent management of the payment institution or e-money institution;

2) who after the acquisition or increase of the holding elects, appoints or designates only such persons as managers of the payment institution or e-money institution who comply with the requirements provided in § 47 of this Act;

3) whose financial situation is sufficiently secure to ensure regular and reliable operation of the payment institution or e-money institution, and, in the case of a legal person, whose financial statements, where available, allow for an adequate assessment to be made of its financial situation;

4) who is able to ensure that the payment institution or e-money institution is able to meet the prudential requirements provided in this Act, in the case of a legal person, above all the requirement that the consolidation group, which part the payment institution or e-money institution will form, has a structure which enables exercise of efficient supervision, exchange of information and co-operation between the financial supervision authorities;

5) with regard to whom there is no justified reason to believe that the acquisition is related to money laundering or terrorist financing or an attempt thereof or increases such risks.

§ 39. Giving notification of acquisition of holding

(1) A person who intends to acquire a direct or indirect qualifying holding in a payment institution or e-money institution or to increase such holding so that the proportion of the share capital of the payment institution or e-money institution or votes represented by shares exceeds 20, 30 or 50 per cent, or to conclude a transaction as a result of which the payment institution or e-money institution will become a company controlled thereby (hereinafter acquirer) notifies the Financial Supervision Authority of its intention beforehand and submit the information and documents provided in subsection 1 of § 40 of this Act and the regulation established on the basis of subsection 2 of § 40 of this Act.

(2) The provisions of this Chapter also apply where a person acquires a qualifying holding in a payment institution or e-money institution or increases such holding so that the proportion of the share capital of the payment institution or e-money institution or number of the votes represented by shares exceeds 20, 30 or 50 per cent due to any other event or as a result of any other transaction or, due to the event or as a result of the transaction, the payment institution or e-money institution becomes a company controlled by the person. In such case, the person is required to give notification to the Financial Supervision Authority immediately after gaining control over the payment institution or e-money institution or becoming aware of the acquisition or increase of a qualifying holding in the payment institution or e-money institution.

(3) The Financial Supervision Authority notifies the acquirer in writing within two working days after receipt of the notice specified in subsection 1 or 2 of this section or the additional information and documents specified in subsection 4 of § 40 of this Act and the possible date of expiry of the procedural time limit provided in § 41 of this Act.

§ 40. Information submitted upon giving notification of acquisition of holding

(1) The Financial Supervision Authority is notified of the name of the company in which a qualifying holding is acquired or increased or which becomes controllable by the acquirer and the size of the holding acquired in this company, and the following information and documents are submitted:

1) a description of the company acquired which contains, among other things, the list of shares and information on the type of shares and number of votes acquired or previously owned by the acquirer and other information where necessary;

2) a curriculum vitae of the acquirer who is a natural person which contains, among other things, the name, residence, education, work and service experience and personal identification code or, in the absence of a personal identification code, the date of birth of the acquirer;

3) a list of the shareholders or members of the acquirer who is a legal person and information on the number of shares and votes owned by each shareholder or member;

4) the name, registered office, registry code, authenticated copy of a registration certificate and a copy of the articles of association, where they exist, of the acquirer who is a legal person or of the (legal) person administering the pool of assets;

5) the information on the members of the management board and supervisory board of the acquirer who is a legal person, including, for each person, the given name and surname, personal identification code or date of birth in the absence of a personal identification code, education, work and service experience, and documents which prove the trustworthiness, experience, competence and impeccable business reputation of such persons;

6) a confirmation that the persons becoming the managers of the payment institution or e-money institution as a result of acquiring a holding have not been punished for an economic offence, official misconduct, offence against property or offence against public trust or financing and support of act of terrorism or activities directed at it, or the information concerning the punishment has been deleted from the criminal records database pursuant to the Criminal Records Database Act. In the case of a citizen of a foreign state, a certificate of the criminal records database or an equivalent document of a competent court or administrative authority of the home state of the person which has been issued less than three months earlier is accepted;

7) a description of the business activities of the acquirer and a description of the economic and non-economic interests of persons connected with the acquisition;

8) a confirmation that in the case of a person specified in clause 6 of this subsection no such circumstances have existed or exist which in accordance with law preclude the right of the person to be a manager of a payment institution or e-money institution;

9) the three preceding annual reports of the acquirer, where they exist. Where more than nine months have passed since the end of the previous financial year, an audited interim report for the first six months of the financial year is submitted. The sworn auditor's report is added to the reports where preparation of the report is prescribed by legislation;

10) where possible, the ratings required for assessing the financial situation of the acquirer who is a natural person and companies connected with the acquirer and reports intended for the public; in the case of the acquirer who is a legal person the credit ratings issued to the acquirer and the consolidation group;

11) where the acquirer is a company belonging to a consolidation group, a description of the structure of the group, data relating to the sizes of the holdings of the companies belonging to the group, and the three preceding annual reports of the consolidation group together with sworn auditor's reports;

12) where the acquirer is a natural person, documents certifying the financial status of the person during the three preceding years;

13) information and documents concerning the sources of monetary or non-monetary resources for which it is intended to acquire a qualifying holding or increase it or gain control;

14) the circumstances relating to the acquisition of holding pursuant to §§ 9, 10 and 72¹ of the Securities Market Act;

15) the size of the qualifying holding owned by the person after acquisition of the holding and the circumstances relating to the holding pursuant to §§ 9, 10 and 72¹ of the Securities Market Act;

16) where a payment institution or e-money institution becomes a controlled company, a business plan and other circumstances related to gaining of control and exercising control;

17) a review of the strategy applied in a payment institution or e-money institution in connection with the acquisition of holdings provided that the payment institution or e-money institution is not turned into a controlled company as a result of the acquisition.

(2) The minister in charge of the policy sector may establish a regulation which specifies the information and documents to be submitted to the Financial Supervision Authority and specified in subsection 1 of this section.

(3) The information and documents submitted to the Financial Supervision Authority must be in Estonian. With the consent of the Financial Supervision Authority, the specified information and documents may be submitted in another language.

(4) The Financial Supervision Authority may request in writing additional information and documents in order to specify or verify the information and documents specified in subsection 1 of this section by specifying which additional information is required.

§ 41. Proceedings and procedural time limits

(1) The Financial Supervision Authority assesses the compliance of the acquirer with the requirements provided in § 38 of this Act and decides to prohibit or authorise the acquisition of holding or granting authorisation for acquisition of a holding within 60 working days (hereinafter procedural time limit) as of the submission of the notice provided in subsection 3 of § 39 of this Act concerning receipt of the information and documents required for the assessment.

(2) The Financial Supervision Authority has the right to request the additional information and documents specified in subsection 4 of § 40 of this Act not later than within 50 working days as of the beginning of the procedural time limit.

(3) The procedural time limit is suspended for the period between the first submission of the demand by the Financial Supervision Authority for additional information and documents specified in subsection 2 of this section and the receipt from the acquirer of the demanded additional information and documents, but the suspension does not exceed 20 working days. The procedural time limit is not suspended where further additional information and documents are demanded.

(4) Where no financial supervision is exercised over an acquirer or a financial supervision authority of a third country exercises supervision over the acquirer, the Financial Supervision Authority may extend the procedural time limit specified in subsection 3 of this section to up to 30 working days.

(5) Upon assessment of acquisition and increase of the qualifying holding or upon turning a payment institution or e-money institution into a controlled company, the Financial Supervision Authority co-operates with the financial supervision authority of the Contracting State where the acquirer is:

1) an insurance undertaking, credit institution, management company, investment fund, investment firm, payment institution, e-money institution or another person subject to financial supervision that has been granted an authorisation in a Contracting State;

2) a parent company of an insurance undertaking, credit institution, management company, investment fund, investment firm, payment institution, e-money institution or another person subject to financial supervision that has been granted an authorisation in a Contracting State;

3) a person controlling an insurance undertaking, credit institution, management company, investment fund, investment firm, payment institution, e-money institution or another person subject to financial supervision that has been granted an authorisation in a Contracting State.

(6) The Financial Supervisory Authority consults with other financial supervision authorities in the framework of the co-operation specified in subsection 5 of this section. The Financial Supervision Authority and corresponding financial supervision authorities immediately forward to each other all the information that is essential upon assessment of acquisition or increase of the qualifying holding or upon turning a payment institution or e-money institution into a controlled company.

(7) Where multiple persons simultaneously intend to acquire a qualifying holding, the Financial Supervision Authority must treat them equally under equal circumstances.

§ 42. Requirements for acquisition of holding

(1) The Financial Supervision Authority has the right to set a time limit for the acquirer during which the acquirer has the right to acquire or increase a qualifying holding or turn a payment institution or e-money institution into a controlled company. The Financial Supervision Authority may extend the time limit prescribed but the time limit may not exceed 12 months in total. The acquirer is required, within the specified time limit, to give notification to the Financial Supervision Authority immediately of making a decision to conclude or not to conclude a transaction to acquire or increase a qualifying holding, or to turn a payment institution or e-money institution into a controlled company.

(2) A qualifying holding may be acquired or increased or the payment institution or e-money institution may be turned into a controlled company provided that the Financial Supervision Authority does not prohibit, by a precept, the acquisition or increase of a qualifying holding or turning of the payment institution or e-money institution into a controlled company based on the provisions of § 41 and subsection 1 of § 43 of this Act.

§ 43. Bases for prohibition on acquisition of holding and decision on acquisition

(1) The Financial Supervision Authority may prohibit, by a precept, the acquisition and increase of a qualifying holding and turning a payment institution or e-money institution into a controlled company where:

1) the acquirer does not comply with the requirements provided in § 38 of this Act;

2) the acquirer fails to submit the information or documents provided in this Act or requested pursuant to this Act to the Financial Supervision Authority;

3) The information or documents submitted to the Financial Supervision Authority do not comply with the requirements provided by legislation or are incorrect, misleading or incomplete, or based on the information and documents submitted, the Financial Supervision Authority cannot exclude reasonable doubt that the acquisition is improper and does not comply with the requirements provided in this Act;

4) the payment institution or e-money institution would become a company controlled by a person residing or located in a third country and sufficient supervision is not exercised over the person in the country of residence or location of the person or the financial supervision authority of the third country has no legal basis or possibility to co-operate with the Financial Supervision Authority.

(2) The Financial Supervision Authority forwards a decision to the acquirer concerning the authorisation to acquire the qualifying holding or a prohibiting precept within two working days as of the making of the decision but prior to the expiry of the procedural time limit. Where financial supervision over the acquirer is exercised by the financial supervision authority of another Contracting State, the decision must also include, among other things, its assessment of the acquisition or increase of the qualifying holding or turning a payment institution or e-money institution into a controlled company.

(3) Where the circumstances specified in subsection 1 of this section become evident after the acquisition or increase of a qualifying holding or turning a payment institution or e-money institution into a controlled company, the Financial Supervision Authority may issue a precept according to which the acquisition of qualified holding or turning of a payment institution or e-money institution into a controlled company is deemed to be contrary to this Act.

(4) The Financial Supervision Authority, by its precept, has the right to prohibit or restrict in each specific case the exercise of voting rights or other rights enabling control in a payment institution or e-money institution by the acquirer or a person who has a qualifying holding in the payment institution or e-money institution or who controls the payment institution or e-money institution provided that the circumstances provided in subsection 1 or 3 of this section exist. The Financial Supervision Authority may issue a precept regardless of whether a precept provided in subsection 1 or 3 of this section is issued. The Financial Supervision Authority publishes the precept on its website at the request of the acquirer or, where necessary, on its own initiative.

(5) Where an acquirer or a person who has a qualifying holding in a payment institution or e-money institution or who controls a payment institution or e-money institution is a credit institution, management company, investment fund, investment firm, insurance undertaking, payment institution or e-money institution registered in another Contracting State, another person subject to financial supervision or a person belonging to the same consolidation group with an aforementioned person, the Financial Supervision Authority informs the competent financial supervision authority of that Contracting State of issue of a precept specified in subsection 3 or 4 of this section.

(6) Compliance with the precepts of the Financial Supervision Authority provided in subsections 1, 3 and 4 of this section is also mandatory for the payment institution or e-money institution, the person maintaining the share register thereof or another person who organises the exercise of voting rights.

§ 44. Consequences of illegal acquisition of holding

(1) As a result of a transaction by which a qualifying holding is acquired or increased, the person does not acquire the voting rights determined by the shares, and the votes represented by the shares are not included in the quorum of the general meeting where:

1) the transaction is contrary to a precept issued by the Financial Supervision Authority;

2) the Financial Supervision Authority has issued a precept specified in subsection 3 or 4 of § 43 of this Act;

3) the Financial Supervision Authority has not been informed of the transaction pursuant to the procedure provided in § 39 of this Act;

4) the transaction is concluded after the expiry of the time limit specified in subsection 1 of § 43 of this Act or before the expiry of the time limit specified in § 41 of this Act or before the acquisition of a qualifying holding was permitted pursuant to this Act.

(2) As a result of a transaction in the case of which any of the circumstances specified in subsection 1 of this section exist, the rights which turn the payment institution or e-money institution into a company controlled by the person do not arise for the person.

(3) Where voting rights representing a qualifying holding acquired or increased by a transaction, in the case of which any of the circumstances specified in subsection 1 of this section exist, are included in the quorum of the general meeting and influence the adoption of a resolution of the general meeting, the resolution of the general meeting is void. A court may declare the resolution of the general meeting void on the basis of a petition of the Financial Supervision Authority, a shareholder or a manager of the company, provided that the petition is submitted within three months as of the adoption of the resolution of the general meeting.

(4) In the case of exercise of the rights enabling control which arise from a transaction whereby the payment institution or e-money institution was to be turned into a company controlled by the person and in respect of which any of the circumstances specified in subsection 1 of this section exists, a court may declare the exercise of such rights invalid on the basis of a petition of the Financial Supervision Authority, a shareholder or a manager of the company, provided that the petition is submitted within three months as of the exercise of the rights.

§ 45. Giving notification of changes in qualifying holding

(1) Where a person intends to transfer shares in an amount which would result in the person losing the qualifying holding in a payment institution or e-money institution or where the person reduces their holding such that it falls below one of the limits specified in subsection 1 of § 39 of this Act or foregoes control over the payment institution or e-money institution, the person is required to inform the Financial Supervision Authority immediately of the intention and indicate the number of shares which the person owns and transfers and holds after the transaction.

(2) The provisions of subsection 1 of this section also apply where a person loses control over a payment institution or e-money institution or the qualifying holding in a payment institution or e-money institution due to any other event or as a result of any other transaction or where the holding of the person is reduced such that it falls below one of the limits specified in subsection 1 of § 39 of this Act. In such case, the person is required to inform the Financial Supervision Authority immediately after becoming aware of the loss of the qualifying holding or control or the reduction of holding.

(3) Upon becoming aware of transactions specified in subsections 1 and 2 of § 39 of this Act or subsections 1 and 2 of this section, a payment institution or e-money institution is required to immediately inform the Financial Supervision Authority thereof.

(4) A payment institution or e-money institution submits together with its annual report to the Financial Supervision Authority information concerning persons who, as at the end of the financial year, have a qualifying holding in the payment institution or e-money institution, indicating the size of holding owned by the person and related circumstances pursuant to §§ 37 and 39 of this Act and §§ 9, 10 and 72¹ of the Securities Market Act.

§ 46. Registered office and head office of payment institutions and e-money institutions

(1) The registered office and head office of a payment institution or e-money institution entered in the commercial register in Estonia and authorised by the Financial Supervision Authority must be in Estonia.

(2) The partnership agreement or articles of association of a payment institution or e-money institution must determine that the registered office and head office of the payment institution or e-money institution are in Estonia.

§ 47. Requirements for managers and employees

(1) Only persons who have the education, experience and professional qualifications necessary to manage a payment institution or e-money institution and who have an impeccable business reputation may be elected or appointed managers of payment institutions and e-money institutions.

(2) The management board of a payment institution or e-money institution consists of at least two members.

(4) It is prohibited to elect or appoint the following persons as managers of payment institutions or e-money institutions:

1) a person whose earlier activities have resulted in the bankruptcy, compulsory liquidation or withdrawal of the authorisation of a company;

2) a bankrupt or person who is subject to a prohibition on business or who has been deprived of the right to engage in economic activity pursuant to law;

3) a person whose earlier activities as a manager of a company have shown that the person is not capable of organising the management of a company such that the interests of the shareholders, members, creditors and clients of the company are sufficiently protected;

4) a person who has been punished for an economic offence, official misconduct, offence against property or offence against public trust or financing and support of act of terrorism or activities directed at it, and whose corresponding information concerning the punishment has not been deleted from the criminal records database pursuant to the Criminal Records Database Act;

5) a person whose earlier activities have shown that the person is not suitable to manage a company for any other good reason.

(5) The managers and employees of a payment institution or e-money institution are required to act with the prudence and competence expected of them and according to the requirements for their positions and the interests of the payment institution or e-money institution and its clients.

(6) The managers and employees of a payment institution or e-money institution are required to give priority to the economic interests of the payment institution or e-money institution and the clients thereof over their own personal economic interests. In addition to the above, the managers and employees of a payment institution or e-money institution are required to ensure the continuous existence of financial resources necessary for the economic activities, provide services lawfully with due professionalism, precision and care and provide clients with necessary information on payment services.

(7) The managers of a payment institution or e-money institution must guarantee that the organisational structure of the payment institution or e-money institution is transparent, the areas of responsibility are clearly delineated and procedures for the establishment, measurement, management, constant monitoring and reporting of risks have been established and that such procedures are sufficient and proportional taking into account the nature, extent and level of complexity of the operation of the payment institution or e-money institution.

(8) The managers of a payment institution or e-money institution are required to regularly review the regulations and other rules of procedure established on the basis of this Act, evaluate their efficiency and take appropriate measures to eliminate any deficiencies.

§ 48. Giving notification of managers and auditor

(1) Upon the election or appointment of a manager of a payment institution or e-money institution, the person to be elected or appointed must present the following to the payment institution or e-money institution:

1) information specified in clauses 14 and 15 of subsection 1 of § 15 of this Act;

2) a confirmation that no circumstances exist which, according to this Act, would preclude the management of a payment institution or e-money institution.

(2) A payment institution or e-money institution submits the information and confirmation specified in subsection 1 of this section to the Financial Supervision Authority.

(3) Upon the election or appointment of an auditor, a payment institution or e-money institution submits to the Financial Supervision Authority the name of the auditor together with a confirmation that no circumstances exist which would preclude the right to be an auditor of a payment institution or e-money institution.

(4) A payment institution or e-money institution is required to inform the Financial Supervision Authority of the intention to elect or appoint managers or an auditor, and of their resignation or the initiation of their removal before the expiry of their term of office or the extension of the term of office of a manager at least ten days before making the corresponding decision or immediately after the receipt of the corresponding application.

§ 49. Removal of manager of payment institution and e-money institution

(1) The Financial Supervision Authority has the right to issue a precept to demand the removal of a manager of a payment institution or e-money institution in the following cases:

1) the person does not comply with the requirements established for managers in this Act;

2) the person has submitted misleading or inaccurate information or falsified documents in connection with their election or appointment;

3) the activities of the person in managing the payment institution or e-money institution have shown that the person is not capable of sound and prudent management of the payment institution or e-money institution or the person is not capable of organising the management of the payment institution or e-money institution such that the interests of the clients and creditors are sufficiently protected.

(2) Where a payment institution or e-money institution fails to comply with a precept specified in subsection 1 of this section in full or within the prescribed time limit, the Financial Supervision Authority has the right to demand the removal of the manager of the payment institution or e-money institution by a court or withdraw the authorisation of the payment institution or e-money institution.

(3) A court may, at the request of the Financial Supervision Authority or the management board, the supervisory board or a shareholder of the payment institution or e-money institution, appoint a new member to replace a member removed from the supervisory board. The term of office of a court-appointed member of the supervisory board expires upon the election of a new member of the supervisory board by the general meeting.

§ 50. Internal rules of payment institution and e-money institution

(1) A payment institution or e-money institution must establish and apply rules of procedure regulating the activities of the payment institution or e-money institution and its managers and employees (hereinafter in this Chapter internal rules), which ensure that legislation regulating the activities of the payment institution or e-money institution and that decisions taken by the managing bodies are complied with.

(2) The internal rules established and applied by a payment institution or e-money institution must ensure legitimate and regular provision of services. A payment institution or e-money institution evaluates regularly the efficacy of its internal rules and the correspondence thereof to the actual situation, and updates the internal rules in order to guarantee the protection of the interests of the clients.

(3) Among other things, the internal policies determine:

1) the procedure for the movement of the internal information and documents, including the requirements for submission and forwarding of information;

2) the procedure for the provision of payment services or e-money services, including a plan for determination of a risk of interruption of business, for managing or prevention of the risk thereof;

3) the procedure for the conclusion of transactions and performance of acts in the name and for the account of the payment institution or e-money institution or in the name and for the account of clients;

4) duties and functions of employees, relationships of subordination, reporting chains, the procedure for reporting and the delegation of rights, and provide the separation of functions upon assumption of obligations in the name of the payment institution or e-money institution, the recording of services for accounting and reporting purposes and the assessment of risks;

5) the procedure for maintaining databases and processing of data;

6) internal rules of procedure which set out the safety and regular monitoring of information and communication technology systems used and systems used for the safekeeping of assets of clients;

7) the procedure for the functioning of the internal control system;

8) internal rules of procedure for imposing international sanctions established on the basis of the International Sanctions Act and application of the Money Laundering and Terrorist Financing Prevention Act, and the code of conduct for verification of compliance therewith;

9) the procedure for the establishment and solution of security-related client complaints and security incidents and for the implementation of corresponding measures, including the procedure for notification of incidents in compliance with the requirements for notification of major incidents related to information and communication technology provided in Chapter III of Regulation (EU) No 2022/2554 of the European Parliament and of the Council, and of significant operational or security incidents related to the payment services they provide.

10) the procedure for the registration, monitoring, following and restriction of access to sensitive payment data;

11) the procedure for ensuring business continuity, including a list of important acts, effective information and communication technology business continuity policy and plans as well as information and communication technology response and recovery plans, and proceedings for keeping such plans up-to-date and regularly testing and reviewing the efficiency thereof in accordance with the provisions of Regulation (EU) No 2022/2554 of the European Parliament and of the Council;

12) the procedure for collecting statistical information on efficiency, transactions and fraud;

13) upon the existence of branches or agents, the procedure for the verification of compliance with requirements of activities according to subsection 5¹ of § 51 of this Act.

(4) The internal rules of a payment institution providing the payment service specified in clause 8 of subsection 1 of § 3 of this Act are not required to contain the procedure specified in clause 12 of subsection 3 of this section.

(4¹) A payment institution or e-money institution must establish a procedure for its employees for reporting of violations of any requirements provided in this Act and create a reporting channel in accordance with § 8 of the Act on Protection of Whistleblower of Work-Related Violations of European Union Law, which enables internal reporting of offences. When reporting an offence, whistleblower protection is applied for the purposes of the Act on Protection of Whistleblower of Work-Related Violations of European Union Law and the legislation established on the basis thereof.

(5) The minister in charge of the policy sector may establish by a regulation more specific requirements for internal rules.

§ 51. Internal control and preservation of information

(1) A payment institution or e-money institution must apply sufficient internal control measures which cover all levels of management and operations of the payment or e-money institution.

(2) The supervisory board of a payment institution or e-money institution appoints the head of internal audit for the performance of the duties of the internal audit unit (hereinafter internal auditor). An internal auditor is subject to the requirements and the legal bases provided by the Auditors' Activities Act in respect of certified internal auditors. An internal auditor may not perform duties which create or may create a conflict of interests.

(3) The duty of an internal auditor is to monitor whether the activities of a payment institution or e-money institution and its managers and employees comply with legislation, the precepts of the Financial Supervision Authority, the resolutions of managing bodies, the internal rules, agreements entered into with the payment institution or e-money institution and good practice.

(4) A payment institution or e-money institution ensures that the internal auditor has the rights and working conditions necessary to perform their duties, including the right to obtain explanations and information from the managers and employees of the payment institution or e-money institution and to observe the elimination of any deficiencies discovered and compliance with any proposals made.

(5) An internal auditor is required to forward any information concerning a payment institution or e-money institution which becomes known them and which indicates a violation of law or damage to the interests of clients to the managers of the payment institution or e-money institution and the Financial Supervision Authority immediately in writing.

(5¹) A payment institution or e-money institution verifies compliance of the activities of its agents and branches with the requirements and carries out on-site inspections in the place of business of the agent or the branch at least once a year.

(6) A payment institution or e-money institution and their foreign branches preserve the information provided in this Act unaltered and available to the Financial Supervision Authority for a period of five years unless the Financial Supervision Authority has set a different time limit or a longer time limit is provided by law.

(7) A payment institution and e-money institution and their foreign branches preserve the documents which set out the respective rights and obligations of the payment institution or e-money institution and the client under a contract for the provision of services, or the terms on which the payment institution or e-money institution provides the services to the client for at least the duration of the legal relationship related to the provision of payment services or e-money services with the client unless a longer time limit is provided by this Act or other legislation.

(8) The Financial Supervision Authority has the right to require that, following the expiry of the authorisation of a payment institution or e-money institution, the payment institution or e-money institution preserve information until the expiry of the period of five years provided in subsection 6 of this section.

§ 52. Transformation and division

(1) The transformation of a payment institution or an e-money institution is only permitted from a private limited company into a public limited company.An authorisation of the Financial Supervision Authority is required for transformation.

(1¹) A payment institution or an e-money institution is transformed pursuant to the procedure provided in the Commercial Code, unless otherwise provided by this Act.

(1²) In order to obtain an authorisation specified in subsection 1 of this section, a payment institution or an e-money institution submits to the Financial Supervision Authority an application together with the following information and documents:

1) the resolution of the shareholders’ meeting on amendment of the articles of association, and the amended text of the articles of association;

2) the minutes of the shareholders’ meeting;

3) the transformation report.

(1³) The Financial Supervision Authority makes a decision to issue or refuse to issue an authorisation for transformation within one month after receipt of all the required information and documents but not later than three months after receipt of the application.

(1⁴) The Financial Supervision Authority may refuse to grant the authorisation for transformation where:

1) the financial situation of the payment institution or e-money institution applying for the authorisation for transformation does not comply with the requirements provided in this Act;

2) the documentation relating to the transformation does not comply with the requirements provided in this Act or the Commercial Code;

3) the transformation may damage the interests of the clients of the payment institution or e-money institution for other reasons;

4) there are other substantial grounds for not permitting the transformation.

(1⁵) The Financial Supervision Authority publishes a decision to grant an authorisation for transformation on its website not later than on the working day following the day the decision is made.

(1⁶) An authorisation of the Financial Supervision Authority for the transformation of a payment institution or an e-money institution is appended to the petition specified in subsection 1 of § 485 of the Commercial Code and to be submitted to the registrar of the commercial register.

(1⁷) Cross-border transformation of a payment institution or an e-money institution is prohibited.

(2) Division of a payment institution or e-money institution is prohibited.

§ 53. Merger

(1) The merger of a payment institution or e-money institution is effected pursuant to the procedure provided in the Commercial Code, unless otherwise provided by this Act.

(2) A payment institution may merge only with another payment institution or a credit institution and an e-money institution may merge only with another e-money institution, except with a credit institution as the company being acquired in the case provided in clause 2 of subsection 1 of § 65 of the Credit Institutions Act.

(3) Where payment institutions or e-money institutions merge by founding a new payment institution or e-money institution, the payment institution or e-money institution being founded as a result of merger must apply for an authorisation pursuant to the procedure provided in Chapter 2 of this Act.

(4) A payment institution or e-money institution being founded and an acquiring payment institution or e-money institution must comply with the prudential requirements provided in this Act and legislation established on the basis thereof.

(5) An authorisation from the Financial Supervision Authority is required for the merger of payment institutions and the merger of e-money institutions (hereinafter authorisation for merger).

§ 54. Merger agreement and merger report

(1) The merger agreement of a payment institution or e-money institution may not be entered into with a suspensive or resolutive condition. The merger agreement may only provide a condition according to which the merger agreement enters into force after the Financial Supervision Authority grants an authorisation for merger.

(2) The Financial Supervision Authority must be informed of entry into a merger agreement between payment institutions or e-money institutions within ten days after the entry into the merger agreement.

(3) Upon the merger of payment institutions or e-money institutions, a merger report must be prepared and the report must be audited by an auditor.

(4) An auditor's report must set out the assessment methods which have been used upon determination of the exchange ratio of shares, and provide an opinion on whether the acquiring payment institution or e-money institution complies with the prudential requirements provided in this Act.

§ 55. Authorisation for merger

(1) In order to be granted an authorisation for merger, the acquiring payment institution or e-money institution submits or merging payment institutions or e-money institutions jointly submit an application (hereinafter in this Chapter application for authorisation for merger) to the Financial Supervision Authority to which the following information and documents are appended:

1) the merger agreement or a notarially certified copy thereof;

2) the merger report;

3) merger resolutions where the adoption thereof is required;

4) the auditor's report;

5) the information and documents specified in clauses 13 and 14 of subsection 1 of § 15 of this Act concerning the acquiring payment institution or acquiring e-money institution;

6) the business plan provided in § 16 of this Act for the three years following the merger;

7) the draft of the internal rules specified in § 50 of this Act;

8) the decision by the Competition Authority to grant permission to concentrate, where the obligation to apply for such permission arises from the Competition Act, or a confirmation from the acquiring payment institution or e-money institution that it has applied to the Competition Authority for permission to concentrate and such permission has been granted pursuant to subsection 5 of § 27 of the Competition Act;

9) the decision by the Consumer Protection and Technical Regulatory Authority to grant a foreign investment authorisation, where the obligation to apply for such authorisation arises from the Foreign Investment Reliability Assessment Act, or a confirmation from the acquiring payment institution or e-money institution that it has applied to the Consumer Protection and Technical Regulatory Authority for a foreign investment authorisation and such authorisation has been granted pursuant to subsection 1 of § 11 of the same Act.

(2) In order to be granted an authorisation for merger upon the merger of payment institutions or merger of e-money institutions by founding a new payment institution or e-money institution, the merging payment institutions or e-money institutions jointly submit an application for an authorisation for merger to the Financial Supervision Authority to which the following information and documents are appended:

1) the merger agreement or a notarially certified copy thereof;

2) the merger report;

3) merger resolutions where the adoption thereof is required;

4) the auditor's report;

5) an application for an authorisation provided in § 15 of this Act.

§ 56. Processing of application for authorisation for merger and decision on grant of authorisation for merger

(1) The provisions of § 17 of this Act apply to the processing of applications for authorisations for merger, verification of the submitted information and documents and verification whether the applicant for the authorisation for merger has adequate facilities for the provision of payment services or e-money services and whether the acquiring payment institution or acquiring e-money institution complies with the requirements arising from this Act or legislation issued on the basis thereof.

(2) The Financial Supervision Authority makes a decision to grant or refuse to grant an authorisation for merger within one month after receipt of all the necessary information and documents, but not later than within three months after receipt of the application.

(3) The Financial Supervision Authority delivers immediately the decision to grant or refuse to grant an authorisation for merger to the acquiring payment institution or acquiring e-money institution or merging payment institutions or merging e-money institutions.

(4) The Financial Supervision Authority decides to withdraw the authorisations of the merging payment institutions or merging e-money institutions upon merger of payment institutions or e-money institutions by founding a new payment institution or e-money institution together with the decision to grant an authorisation to a payment institution or e-money institution being founded as a result of a merger, and the decision does not enter into force before the date of entry of the new payment institution or e-money institution in the commercial register.

(5) The Financial Supervision Authority decides to withdraw the authorisation of a payment institution or e-money institution being acquired upon merger of payment institutions or e-money institutions together with the decision to grant an authorisation for merger to the acquiring payment institution or acquiring e-money institution.

(6) The Financial Supervision Authority publishes a decision to grant an authorisation for merger on its website not later than on the working day following the day the decision is made.

§ 57. Bases for refusal to grant authorisation for merger

The Financial Supervision Authority may refuse to grant the authorisation for merger where:

1) the managers of the acquiring or a new payment institution or the acquiring or a new e-money institution do not comply with the requirements arising from this Act and legislation established on the basis thereof;

2) the merger would violate the limitations on investment provided in this Act or legislation established on the basis thereof;

3) the financial situation of the acquiring or a new payment institution or the acquiring or a new e-money institution does not comply with the requirements provided in this Act;

4) the merger agreement does not comply with the requirements provided in this Act or other legislation;

5) close links between the acquiring or a new payment institution or the acquiring or a new e-money institution and another person prevent sufficient supervision over the payment institution or e-money institution;

6) the merger may damage the interests of the clients or other creditors of the payment institution or e-money institution for other reasons.

§ 58. Merger notification

(1) Merging payment institutions and merging e-money institutions must immediately publish a merger notification concerning the fact of being granted an authorisation for merger in at least one national daily newspaper and on their website, where it exists.

(2) A payment institution or e-money institution submits an application for entry of the merger in the commercial register immediately after publication of the merger notice specified in subsection 1 of this section.

§ 59. Use of paying agents

(1) A paying agent is a natural or a legal person who is an authorised representative of a payment institution and who may provide payment services specified in subsection 1 of § 3 of this Act. Such activity may be an ancillary activity of a paying agent.

(2) A payment institution which intends to provide its services through a paying agent must submit the following information and documents to the Financial Supervision Authority:

1) the name of the paying agent and the names of the persons connected with the management of the paying agent;

2) the address of the paying agent;

3) a description of the internal control measures applied by the paying agent in order to comply with the requirements arising from the Money Laundering and Terrorist Financing Prevention Act;

4) information certifying the trustworthiness of the paying agent or the persons connected with the management of the paying agent provided that the agent is not a payment service provider specified in subsection 6 of § 3 of this Act;

5) payment services provided through the paying agent;

6) the commercial registry code or personal identification code of the paying agent.

(3) The Financial Supervision Authority demands the submission of additional information and documents in order to protect the interests and rights of the clients of the payment institution in the case it is not convinced on the basis of the information and documents specified in subsection 2 of this section as to whether the paying agent has adequate facilities for the provision of services or whether it complies with the requirements for paying agents prescribed by this Act or whether other circumstances relating to the paying agent need to be verified.

(4) A payment institution immediately informs the Financial Supervision Authority of changes in the information specified in subsection 2 of this section and of termination of use of a paying agent.

(5) A payment institution is required to ensure that its paying agent informs clients regarding on whose behalf the agent is acting.

§ 60. List of paying agents

(1) Only a paying agent included in the list of paying agents (hereinafter list) is permitted to operate as a paying agent, and a payment institution is permitted to use only the services provided by a paying agent entered in such list.

(2) The list is published on the website of the Financial Supervision Authority.

(3) A paying agent is entered in the list and deleted from the list by the Financial Supervision Authority.

(4) The Financial Supervision Authority decides to include or refuse to include a paying agent in the list within two months after the receipt of the documents and information specified in subsection 2 of § 59 of this Act. The decision to refuse to include an agent in the list is immediately communicated to the payment institution.

§ 61. Requirements for paying agents

(1) Paying agents who are natural persons and members of the management board of paying agents who are companies must have impeccable professional and business reputation.

(2) The following cannot operate in the capacity of the person specified in subsection 1:

1) a person whose act has resulted in the bankruptcy or compulsory liquidation of a company or the withdrawal of the authorisation of a company;

2) a person who is subjected to a prohibition on business;

3) a person whose activities have shown that they are not capable of organising the management of a company such that the interests of the shareholders, members, creditors and clients of the company are sufficiently protected;

4) a person who has been punished for an economic offence, official misconduct, offence against property or offence against public trust or financing and support of act of terrorism or activities directed at it, and whose corresponding information concerning the punishment has not been deleted from the criminal records database pursuant to the Criminal Records Database Act.

§ 62. Requirements for outsourcing of activities related to payment services or e-money services

(1) For the better performance of its duties, a payment institution or e-money institution has the right to outsource the activities or operational functions related to the provision of payment services or e-money services to third parties (hereinafter in this section outsourcing). In such case, the payment institution or e-money institution must give prior notice thereof to the Financial Supervision Authority.

(2) Important operational functions, activities and information and communication systems may not be outsourced in such manner which may damage or decrease the capability of the payment institution or e-money institution to conduct effective internal control or the exercise of sufficient supervision over the payment institution or e-money institution.

(3) Important operational functions or activities are activities the failure to perform or inadequate performance of which would significantly impair the compliance of the payment institution or e-money institution with the requirements of this Act, the requirements of legislation issued on the basis thereof or with the conditions and obligations of its authorisation, or its financial performance, reliability, or the soundness or the continuity of its services.

(4) A payment institution or e-money institution establishes outsourcing procedure by its internal rules and the outsourcing of important operational functions must meet at least the following conditions:

1) outsourcing must not result in the delegation by the managers of the payment institution or e-money institution of its responsibility;

2) outsourcing must not damage the interests of the clients of the payment institution or e-money institution and the relationships with the clients and obligations to the clients must not be altered due to outsourcing;

3) outsourcing must not be contrary to the conditions which the payment institution or e-money institution must meet in order to be granted an authorisation in accordance with this Act and to remain in conformity with the authorisation;

4) outsourcing must not remove or modify any other conditions based on which the authorisation was granted to the payment institution or e-money institution.

(5) Upon outsourcing of important operational functions or any other activities related to the services provided by a payment institution or e-money institution, including upon use of agents or distributors, the payment institution or e-money institution remain fully responsible for the due performance of the outsourced operational functions and the compliance of the activities with the requirements arising from this Act.

(6) A payment institution or e-money institution must exercise due skill, care and diligence when entering into, performing or terminating any contracts for outsourcing of important operational functions and activities related to services.

(7) Where a payment institution or e-money institution has not performed its obligations to a third party provided in subsection 1 of this section, the third party cannot make its respective claims against the clients of the payment institution or e-money institution.

(8) A payment institution or e-money institution must have the right to terminate, where necessary, the outsourcing contract with reasonable advance notice, without damaging the continuity and quality of the provision of services to the clients or the legitimate interests thereof.

(8¹) A payment institution or e-money institution immediately informs the Financial Supervision Authority of termination of the outsourcing of activities and operational functions or changes to the circumstances relating to outsourcing.

(9) The Financial Supervision Authority may issue to a payment institution or e-money institution a percept requiring withdrawal of the right to provide services granted to a paying agent or distributor where the legitimate interests of clients of the payment institution or e-money institution are violated or there is a danger of such violation.

(10) The Financial Supervision Authority may issue a precept requiring termination of the outsourcing of activities or operational functions related to services to a certain person or termination of all contracts for outsourcing of activities or operational functions entered into by the payment institution or e-money institution with third parties where:

1) the third party lacks the qualifications needed for the performance of the activities or functions of the payment institution or e-money institution;

2) the legitimate interests of clients of the payment institution or e-money institution are violated or there is a danger of such violation;

3) the financial supervision authority of a third country which exercises supervision over a person of a third country has no legal basis or possibilities for co-operation with the Financial Supervision Authority;

4) a third party to which the activities or functions of the payment institution or e-money institution are outsourced does not comply with the requirements for the performance of the activities or functions outsourced thereto;

5) other conditions specified in this section are violated.

§ 63. Requirements for provision of payment services and e-money services

(1) The provisions of Chapter 40 of the Law of Obligations Act and other legislation concerning payment order and payment services apply to the provision of payment services and payment service contracts.

(2) An e-money issuer is required to immediately issue e-money in exchange for the money of the client at par value of the money received.

(3) At the request of the e-money holder, an e-money issuer is required to redeem the e-money issued by the e-money issuer at par value for cash or by a transfer to a payment account.

(4) An e-money issuer or a distributor acting on behalf of the e-money issuer submits the following information to the client at the request thereof:

1) the business name of the e-money issuer, the address of its place of business and other relevant address important in the relations between the client and the e-money issuer and, where necessary, the address of its distributor, agent or branch and a reference to the list specified in § 105 of this Act, where the e-money issuer is entered;

2) information on the risks related to e-money services, taking into account the type and volume of the offered services;

3) the balance of e-money on the e-money device.

(5) A contract entered into between an e-money issuer and e-money holder, including a person who receives e-money as means of payment, clearly states the conditions of redemption of e-money, including conditions of payment of fees. Before entry into a contract, an e-money issuer is required to inform the client of the conditions of redemption of e-money and the fees related thereto.

(6) A fee for redemption of e-money must be proportional to and comply with the actual costs incurred by the e-money issuer and redemption may be subject to a fee only where charging a fee is prescribed by the contract pursuant to subsection 5 of this section and at least one of the following conditions is met:

1) the e-money holder requests redemption of e-money before termination of the contract;

2) the e-money holder cancels the contract before the date of redemption of e-money provided by the contract;

3) the e-money holder requests redemption of funds related to the unused e-money more than one year after the date of termination of the contract.

(7) Where an e-money holder requests redemption of e-money on the date of termination of the contract or within one year after the date of termination of the contract:

1) the total monetary value of e-money held is be redeemed;

2) all funds requested by the e-money holder are redeemed in the case the e-money institution is engaged in one or more of the activities specified in clause 5 of subsection 2 of § 7 of this Act and it is unknown in advance which proportion of funds is to be used as e-money.

§ 63¹. Settlement of client complaints

(1) A payment service provider is required to reply to a client's complaint in writing or in a form reproducible in writing and to inform the client of satisfaction of the client's complaint or a potential solution to the complaint within reasonable time, but no later than within 15 working days after receipt of the complaint.

(2) In the event that reasons not attributable to the payment service provider make it impossible to reply to a complaint or to perform all the necessary acts for the settlement of a complaint within the time limit specified in subsection 1 of this section, the payment service provider is obligated to provide the client with reasons for the delay and determine an expected time limit for the performance of necessary acts that may not exceed 35 working days.

§ 63². Processing of personal data

(1) A payment initiation service provider does not ask from the clients or try to obtain or store other data than those necessary for the provision of the payment initiation service. A payment initiation service provider may forward to the payee information about the payer other than the information necessary for the execution of the payment transaction which has become known to it in relation to the service only with the consent of the payer.

(2) An account information service provider does not use, try to obtain or store the client's data for purposes other than providing the account information service explicitly requested by the client in accordance with data protection standards. An account information service provider may only receive data from a determined payment account and about payment transactions related to that payment account.

(3) It is not permitted to store sensitive payment data for the provision of payment initiation service.

(4) Payment service providers providing payment initiation service and account information service must ensure that third parties do not have access to clients' personalised safeguards.

(5) Upon applying for confirmation of availability of a necessary amount of money on the payment account of the payer, a payment service provider may process information forwarded as confirmation only for the execution of the card-based payment transaction for which the application was submitted.

(6) For the purposes of this Act, sensitive payment data primarily mean personalised safeguards and other data the unjustified use of which enables a fraud or an act which comprises the necessary elements of both a misdemeanour and a criminal offence to be committed. The payment account number and information about the person in whose name a payment account has been opened with the payment service provider are not considered sensitive data in the event of payment initiation service and account information service.

§ 63³. Processing of personal data without consent of data subject

The payment service provider is permitted to process personal data, except for personal data of special categories, without the consent of the data subject in the cases provided in the Personal Data Protection Act as well as for the discovery, establishment and prevention of payment frauds.

§ 63⁴. Time limit for storing personal data

A payment service provider is entitled to store personal data until the expiry of the limitation period for claims arising from the payment service contract or law, unless otherwise provided by law.

§ 63⁵. Operational risk management

(1) A payment service provider implements security measures and control mechanisms to manage operational risks, including security risks related to the payment services it provides.

(2) A payment service provider submits to the Financial Supervision Authority every year by 1 March at the latest or after a shorter period of time upon the request of the Financial Supervision Authority an up-to-date assessment on the operational risks, including security risks related to the payment services it provides and the sufficiency of the security measures and control mechanisms implemented to react to the said risks.

(3) In addition to subsection 1 of this section, payment institutions and e-money institutions comply with the requirements provided in Regulation (EU) No 2022/2554 of the European Parliament and of the Council.

§ 63⁷. Liability insurance upon provision of account information service and payment initiation service

(1) A payment institution providing the payment service specified in clause 7 or 8 of subsection 1 of § 3 of this Act must have a valid liability insurance for the entire period of its operation to ensure the compensation of damage that may arise from its activities under the following conditions:

1) upon provision of the payment service specified in clause 7 of subsection 1 of § 3 of this Act, insured events include all events that require the payment institution to compensate for damage according to §§ 733², 733³ ja 733⁵ of the Law of Obligations Act;

2) upon provision of the payment service specified in clause 8 of subsection 1 of § 3 of this Act, insured events include all events that require the payment institution to compensate for damage due to unauthorised access or access obtained by fraud to payment account information or the unauthorised use or use by means of fraud of such information;

3) the sum insured is equal to or exceeds the minimum value calculated on the basis of the regulation specified in subsection 4 of this section;

4) insurance cover is valid throughout the territory where the payment institution is providing the payment service specified in clause 7 or 8 of subsection 1 of § 3 of this Act;

5) the insurance cover applies to damage which is caused by an event or act which took place during the period of insurance or the claim for which is filed during the period of insurance where an insurance contract covers the proprietary liability of a payment institution until the expiry of the limitation period of a claim arising from the contract.

(2) A liability insurance contract entered into on the basis of this Act need not cover the damage which:

1) occurs due to intentional violation of obligations of a payment institution;

2) is usually precluded pursuant to the policy conditions of insurance undertakings entering into liability insurance contracts of a payment institution based on international insurance or reinsurance practice.

(3) Instead of a liability insurance contract, a payment institution providing the payment service specified in clause 7 or 8 of subsection 1 of § 3 of this Act may enter into a guarantee contract with a credit or financial institution to ensure the compensation of damage that may arise from its activities and the said contract must be equivalent to the provisions of subsections 1 and 2 of this section.

(4) The procedure and method for the calculation of the minimum value of the sum insured of the liability insurance specified in subsection 1 of this section and the conditions for the implementation of the security specified in subsection 3 are established by a regulation of the minister in charge of the policy sector.

§ 63⁸. Access to payment accounts in credit institutions

(1) A credit institution must ensure that payment institutions have access to payment account services in compliance with legislation and under conditions which must be objective and proportionate in relation to the payment institutions and ensure the equal treatment thereof. This kind of access must be sufficiently extensive for payment institutions to be able to provide payment services to their clients in an unhindered and efficient manner.

(2) A credit institution submits to the Financial Supervision Authority reasons for denying access right.

§ 63⁹. Recognition of compliance with requirements for participation in settlement system

(1) Where a payment institution or an e-money institution specified in subsection 3¹ of § 6 of the Payment and Settlement Systems Act wishes to participate in a settlement system specified in § 3 of the same Act, its activities and documents must comply with the requirements provided in this section and the conditions for joining the settlement system.

(2) In order to apply to join a settlement system, the internal rules and other documents regulating the activities of a payment institution or an e-money institution must be appropriate and sufficiently clear and comprehensible to ensure the reliable and efficient operation of the settlement system.

(3) Compliance of the activities and documents of a payment institution or an e-money institution with the requirements for participation in a settlement system specified in subsections 2 and 4–8 of this section is assessed by the Financial Supervision Authority (hereinafter also recognition of compliance).

(4) For the purpose of recognition of compliance, a payment institution or an electronic money institution submits a written application to the Financial Supervision Authority, together with the following documents and information:

1) a description of the application of the general requirements for safekeeping and protection of the assets of clients pursuant to clause 7 of subsection 1 of § 15 of this Act;

2) the internal rules provided in clause 8 of subsection 1 of § 15 of this Act and the accounting policies and procedures or drafts thereof;

3) the data and procedure specified in clause 9 of subsection 1 of § 15 of this Act;

4) the information specified in clause 14 of subsection 1 of § 15 of this Act;

5) the information specified in clause 16 of subsection 1 of § 15 of this Act;

6) a description of the security policy pursuant to clause 19 of subsection 1 of § 15 of this Act;

7) the procedure for termination of the provision of payment and e-money services in the event of insolvency proceedings being initiated against a payment institution or an e-money institution for the purposes of § 7 of the Payment and Settlement Systems Act;

8) a confirmation that the payment institution or e-money institution complies with the requirements provided in Chapter 9 of this Act;

9) a self-assessment document reflecting an internal analysis of compliance with the requirements for participation in a settlement system.

(5) Where a payment institution or an e-money institution complies with the requirements for safekeeping and protection of the assets of clients in the manner specified in subsection 1 of § 79 or subsection 1 of § 80 of this Act, the following must be submitted for recognition of compliance:

1) an explanation on how it is ensured that client funds entrusted to the payment institution or e-money institution are kept in accordance with subsection 1 of § 79 or subsection 1 of § 80 of this Act;

2) the number and duties of the persons having access to the account specified in clause 2 of subsection 1 of § 79 or clause 2 of subsection 1 of § 80 of this Act and a copy of the draft contract to be concluded in relation to the account;

3) an explanation on how it is ensured that the claims of other creditors of the payment institution or e-money institution are not satisfied on account of the clients of the payment institution or e-money institution.

(6) Where a payment institution or an e-money institution insures the assets of clients under an insurance contract or secures the assets by an equivalent guarantee contract by an insurer or credit institution, the following information must be provided for the purpose of recognition of compliance:

1) detailed procedures for verification of compliance to ensure that the insurance contract or equivalent guarantee contract is sufficient at all times to meet the financial obligations of the payment institution or e-money institution;

2) the duration of the insurance contract or equivalent guarantee contract and the conditions for its extension;

3) a copy of the insurance contract or equivalent guarantee contract or a draft thereof.

(7) The internal rules specified in clause 2 of subsection 4 of this section must contain the following information and documents:

1) the procedure for the functioning of the internal control system pursuant to clause 7 of subsection 3 of § 50 of this Act, including information on the person responsible for such system and their curriculum vitae;

2) upon the existence of branches and agents, the procedure for the verification of compliance with requirements of activities according to clause 13 of subsection 3 of § 50 of this Act;

3) information on the security measures and control mechanisms implemented by the payment institution or e-money institution to manage the risks, including information on the frequency of controls and the human resources provided for this purpose;

4) an explanation on how it is ensured that the payment institution or e-money institution complies with the requirements for outsourcing of activities provided in § 62 of this Act, in order to avoid damaging the quality of internal control of the payment institution or e-money institution;

5) governance arrangements of the consolidation group, where the payment institution or e-money institution is a subsidiary of a payment institution, e-money institution, management company, investment fund, investment firm, credit institution or insurer founded in a Contracting State or other person subject to financial supervision.

(8) Upon development of the procedure for termination of the provision of payment and e-money services specified in clause 7 of subsection 4 of this section, the scope of the planned activities and the business model of the payment institution or e-money institution are taken into account and the procedure must include a description of the mitigating measures that the payment institution or e-money institution will implement in the event of termination of its payment services and that must ensure the termination of pending payment transactions and existing contracts.

(9) The Financial Supervision Authority may exempt a payment institution or an e-money institution from submitting the information and documents specified in this section which the payment institution or e-money institution has already submitted in the procedure for application for an authorisation provided in § 15 of this Act, provided that the information has not changed and the documents comply with the requirements provided in this section.

(10) A payment institution or an electronic money institution that has been recognised to comply with the requirements for participation in a settlement system must comply with those requirements at all times.

§ 63¹⁰. Review of application for participation in settlement system, and making and revocation of decision

(1) The requirements provided in § 17 apply to the processing of applications for recognition of compliance and to the review of the documents and information specified in subsections 3–7 of § 63⁹ of this Act.

(2) The Financial Supervision Authority has the right to refuse to recognise compliance where:

1) the applicant does not comply with the requirements for payment institutions or e-money institutions provided in this Act or legislation issued on the basis thereof;

2) the applicant fails to meet the conditions provided in § 63⁹ of this Act;

3) the applicant has failed to implement a precept issued by the Financial Supervision Authority or perform any other obligation provided in this Act;

4) participation of the applicant in a settlement system threatens the stability or integrity of the settlement system.

(3) The Financial Supervision Authority makes a decision to recognise or refuse to recognise compliance within two months after receipt of all the necessary documents but not later than within four months after receipt of the application.

(4) The Financial Supervision Authority immediately informs the payment institution or e-money institution of a decision to recognise or refuse to recognise compliance.

(5) The Financial Supervision Authority may revoke a decision on the recognition of compliance where a payment institution or an e-money institution:

1) has not applied for participation in a settlement system within six months;

2) has not started participating in a settlement system within 18 months after the communication of the decision on the recognition of compliance;

3) has submitted false information in the application for recognition of compliance which was essential upon making the decision;

4) no longer complies with the requirements for recognition of compliance.

§ 64. Share and initial capital

(1) The share or initial capital of a payment institution must be:

1) at least 20,000 euros where the payment institution provides only the payment service specified in clause 6 of subsection 1 of § 3 of this Act;

2) at least 50,000 euros where the payment institution provides the payment service specified in clause 7 of subsection 1 of § 3 of this Act;

3) at least 125,000 euros where the payment institution provides one or several payment services specified in clauses 1–5 of subsection 1 of § 3 of this Act.

(2) The share or initial capital of an e-money institution must be at least 350,000 euros.

(3) Upon founding a payment institution or e-money institution as a new company only amounts actually paid in may be indicated as the share capital.

(4) In the event of an operating company, the initial capital of a payment institution or e-money institution consists of the capital and reserves specified in points (a) to (e) of Article 26(1) of Regulation (EU) No 575/2013 of the European Parliament and of the Council.

§ 65. Own funds

(1) The own funds of a payment institution and the own funds of an e-money institution are treated in the meaning of Articles 26 to 88 of Regulation (EU) No 575/2013 of the European Parliament and of the Council and the provisions of these Articles apply to them.

(3¹) At least 75 per cent of Tier 1 own funds must consist of Tier 1 basic own funds according to Article 50 of Regulation (EU) No 575/2013 of the European Parliament and of the Council.

(4) The amount of Tier 2 own funds must not exceed one third of Tier 1 own funds.

(6) Tier 2 own funds in excess of limitations prescribed in subsection 4 of this section must not be taken into account for the purposes of calculating own funds.

(8) The reporting procedure for own funds and the principles for the calculation of the minimum amount of own funds are established by a regulation of the minister in charge of the policy sector.

(9) A payment institution or e-money institution immediately informs the Financial Supervision Authority and provides their explanation where their own funds have decreased by more than five per cent or dropped below the required own funds amount required of a payment institution or e-money institution.

(10) The Financial Supervision Authority may set a time limit during which a payment institution or e-money institution must bring its own funds into compliance with the requirements provided in this Act and legislation issued on the basis thereof.

§ 71. Minimum amount of own funds of e-money institutions and calculation thereof

(1) The own funds of an e-money institution must at all times be equal to or exceed the following indicators:

1) the amount of the share or initial capital specified in subsection 2 of § 64 of this Act;

2) the sum of the requirements calculated pursuant to the methods provided in subsections 2 and 5 of this section.

(2) The own funds requirement of an e-money institution related to the issue of e-money equals to two per cent of the average outstanding e-money issued by the e-money institution pursuant to the provisions of subsection 2 of § 12 of this Act.

(3) Where an e-money institution provides payment services which are not related to the issue of e-money or the provision of other services or activities specified in subsection 2 of § 7 of this Act and the amount of outstanding e-money is unknown in advance, the estimated amount of e-money to be issued may be taken as the basis for calculating the own funds requirements. Such estimated amount must be based on historical data. At the request of the Financial Supervision Authority, the e-money institution provides justification and relevant information concerning the calculation of the estimated amount.

(4) An e-money institution which commences activities or has operated for less than six months calculates the own funds requirement on the basis of the amount of e-money presented in the business plan. The Financial Supervision Authority has the right to demand adjustment of the business plan where, in the opinion of the Financial Supervision Authority, the amount of e-money planned to be issued in the business plan does not correspond to the needs of the e-money institution.

(5) Where an e-money institution provides payment services which are not related to the issue of e-money, the provisions of §§ 73–76 of this Act concerning the calculation of the amounts of own funds of payment institutions apply to the calculation of the own funds requirement of the e-money institution related to payment services. The Financial Supervision Authority determines which of the methods provided in §§ 73–75 of this Act is used by the e-money institution to calculate the own funds requirement. Upon determining the appropriate method, the Financial Supervision Authority takes into account the nature of the payment services provided by the e-money institution and the nature, extent and level of complexity of the operation on the basis of the financial data presented in the business plan of the e-money institution.

(6) Based on the evaluations given to the risk management processes, database of loss events, and internal procedures and control, the Financial Supervision Authority has the right to:

1) demand an e-money institution to increase the result received from the application of clause 2 of subsection 1 of this section up to 20 per cent;

2) permit an e-money institution to decrease the result received from the application of clause 2 of subsection 1 of this section up to 20 per cent.

§ 72. Minimum amount of own funds of payment institution

(1) The Financial Supervision Authority determines which of the methods provided in §§ 73, 74 or 75 of this Act is used by a payment institution to calculate own funds, taking into account the nature of the services provided by the payment institution and the nature, extent and level of complexity of the operation. The Financial Supervision Authority may determine the appropriate method on the basis of financial data presented in the business plan of the payment institution.

(2) The own funds of a payment institution must at all times be equal to or exceed the following indicators:

1) the amount of the share or initial capital specified in subsection 1 of § 64 of this Act;

2) the amount of own funds calculated pursuant to one of the three calculation methods provided in §§ 73–75.

(2¹) The provisions provided in subsection 1 and clause 2 of subsection 2 of this section do not apply to a payment institution that only provides the payment service specified in clause 7 of subsection 1 of § 3 of this Act or clauses 7 and 8 of subsection 1 of § 3 of this Act.

(3) Based on the evaluations given to the risk management processes, database of loss events, and internal control mechanisms, the Financial Supervision Authority has the right to:

1) demand a payment institution to increase the result received from the application of clause 2 of subsection 2 of this section up to 20 per cent;

2) permit a payment institution to decrease the result received from the application of clause 2 of subsection 2 of this section up to 20 per cent.

§ 73. Fixed overheads method

(1) The amount of own funds of a payment institution must not be less than 10 per cent of the fixed overheads of the previous financial year after deductions.

(2) The amount of own funds of a payment institution which commences activities or has operated for less than six months must not be less than 10 per cent of the fixed overheads planned in the business plan after deductions.

(3) The Financial Supervision Authority has the right to demand that the amount of fixed overheads which was taken as the basis for calculating the minimum amount of own funds be adjusted after approval of the annual report where significant changes have occurred in the business activities of the payment institution.

(4) The Financial Supervision Authority has the right to demand adjustment of the business plan specified in subsection 2 of this section where, in the opinion of the Financial Supervision Authority, the amount of fixed overheads planned in the business plan does not correspond to the needs of the payment institution.

(5) The amount of fixed overheads of a payment institution is calculated in accordance with Article 34b of Commission Delegated Regulation (EU) No 241/2014, supplementing Regulation (EU) No 575/2013 of the European Parliament and of the Council with regard to regulatory technical standards for Own Funds requirements for institutions (OJ L 74, 14.03.2014, pp 8–26).

§ 74. Payment volume method

(1) In the case of the payment volume method, the own funds of a payment institution must be at least equal to the sum of the following shares multiplied by the scaling factor provided in § 76 of this Act:

1) 4 per cent of the share of payment volume which is up to or equal to 5 million euros;

2) 2.5 per cent of the share of payment volume which is over 5 million euros but not more than 10 million euros;

3) 1 per cent of the share of payment volume which is over 10 million euros but not more than 100 million euros;

4) 0.5 per cent of the share of payment volume which is over 100 million euros but not more than 250 million euros;

5) 0.25 per cent of the share of payment volume which is over 250 million euros.

(2) The shares of payment volume specified in subsection 1 of this section are calculated on the basis of one twelfth of the total amount of payment transactions executed by the payment institution during the preceding year. A payment institution which has operated for less than 12 months during the preceding year divides the amount of payment volume executed during the preceding year with the number of months of being in operation in the preceding year in order to obtain the corresponding factor.

§ 75. Indicator-based method

(1) In the case of the indicator-based method, the own funds of a payment institution must be at least equal to the sum of the following indicators multiplied by the multiplication factor provided in subsection 6 of this section and the scaling factor provided in § 76 of this Act:

1) interest income;

2) interest expenses;

3) received commissions and fees;

4) other operating income.

(2) All the indicators specified in subsection 1 of this section are added up before multiplying, calculating the income with its positive sign and expenses with its negative sign. The indicator is calculated on the basis of the previous annual report approved by the general meeting or meeting of shareholders. A payment institution which commences activities or has operated for less than six months calculates the amount of own funds on the basis of the income and expenses planned in the business plan.

(3) Where the audited data on the basis of which the indicator specified in subsection 1 of this section is calculated are not available, the estimated values reflected in the business plan may be used.

(4) Income from extraordinary or irregular items may not be used in the calculation of the indicator specified in subsection 1 of this section.

(5) The expenses related to the outsourcing of services to third parties may reduce the indicators specified in subsection 1 of this section where the third party is another payment institution for the purposes of this Act.

(6) The multiplication factor specified in subsection 1 of this section is:

1) 10 per cent of the share of the indicator which is up to or equal to 2.5 million euros;

2) 8 per cent of the share of the indicator which is over 2.5 million euros but not more than 5 million euros;

3) 6 per cent of the share of the indicator which is over 5 million euros but not more than 25 million euros;

4) 3 per cent of the share of the indicator which is over 25 million euros but not more than 50 million euros;

5) 1.5 per cent of the share of the indicator which is over 50 million euros.

(7) The own funds calculated pursuant to the indicator-based method must not fall below 80 per cent of the average amount of the indicators specified in subsection 1 of this section of the previous three financial years.

§ 76. Scaling factor

The scaling factors used in payment volume method and indicator-based method are the following:

1) 0.5 where the payment institution provides only the money remittance service specified in clause 6 of subsection 1 of § 3 of this Act;

3) 1 where the payment institution provides at least one of the payment services specified in clauses 1–5 of subsection 1 of § 3 of this Act.

§ 77. Prudential requirements for consolidation groups

(1) Where at least one credit institution belongs to the consolidation group of a payment institution or e-money institution, the consolidation group is deemed to be the consolidation group of the credit institution and the provisions of the Credit Institutions Act and legislation established on the basis thereof apply with respect to the group.

(2) Where a payment institution or e-money institution and a credit institution who is the parent company of the payment institution or e-money institution are subject to consolidated supervision by the Financial Supervision Authority, the payment institution or e-money institution need not follow the provisions of clause 2 of subsection 1 of § 71 and clause 2 of subsection 2 of § 72 of this Act upon calculation of own funds with the consent of the Financial Supervision Authority.

(3) The Financial Supervision Authority grants the consent specified in subsection 2 of this section provided that the following conditions are met:

1) the parent company has no practical or legal impediments at the moment of requesting the consent specified in subsection 2 of this section or in the future as far as it is known for the immediate transfer of own funds or performance of obligations;

2) either the parent company proves to the Financial Supervision Authority the sufficient management of prudential requirements of the subsidiary and guarantees the performance of all the obligations assumed by the subsidiary or the risks related to the subsidiary are insignificant;

3) the procedures for the establishment, measurement, management, constant monitoring and reporting of risks of the parent company also apply to the subsidiary.

(4) In order to prevent multiple application of own funds requirements, the Financial Supervision Authority may decide which obligations related to own funds and calculation thereof provided in this Chapter an e-money institution must perform where:

1) the e-money institution belongs to the same consolidation group as a credit institution, payment institution, investment firm, management company, insurance undertaking or reinsurance undertaking or another e-money institution;

2) the e-money institution provides services other than issue of e-money.

§ 78. General requirements for safekeeping of assets

(1) A payment institution providing one or more of the payment services specified in clauses 1–6 of subsection 1 of § 3 of this Act and an e-money institution must establish the principles for the safekeeping and protection of the assets of clients by internal rules.

(2) A payment institution or e-money institution must invest its assets in liquid assets such that execution of the payment orders or satisfaction of other justified claims of clients is ensured at all times pursuant to the procedure provided by law.

(4) A payment institution or e-money institution is required to apply measures which ensure the possibility to calculate own funds and limitations on investment at all times with sufficient precision.

(5) The minister in charge of the policy sector may establish by a regulation more specific requirements for the safekeeping of assets, limitations on investments, procedure for and specifications of reporting.

§ 79. Requirements for payment institutions for safekeeping of assets

(1) A payment institution providing one or more of the payment services specified in clauses 1–6 of subsection 1 of § 3 of this Act is required to:

1) keep the assets of the client entrusted to the payment institution in connection with the provision of payment services separate from its own assets and the assets related to the areas of activity which are not related to the provision of payment services;

2) deposit the funds of the client in a separate account with a credit institution or in an account opened in Eesti Pank in compliance with the rules and conditions established by Eesti Pank or invest the funds in secure liquid low-risk instruments provided that the payment institution has not transferred the funds related to the provision of payment services to the payee or another provider of payment services by the end of the working day following the date of receipt of the funds.

(2) The assets of the client entrusted to a payment institution in connection with the provision of payment services as well as assets acquired on account of such assets belong to the client related to the payment services and are not included in the bankruptcy estate of the payment institution and the claims of other creditors of the payment institution are not satisfied on account of such assets.

(3) Instead of the obligation provided in subsection 1 of this section, the assets of the client entrusted to a payment institution in connection with the provision of payment services may be covered by an insurance contract or an equivalent guarantee contract by an insurance undertaking or credit institution, which does not belong to the same consolidation group as the payment institution, to the extent equal to the amount which would have been segregated in the absence of the insurance contract or equivalent guarantee contract where the payment institution is unable to meet its financial liabilities to the clients related to the provision of payment services.

(5) The requirements for the safekeeping of assets provided in subsections 1 and 2 or subsection 3 of this section apply to the amount known or estimated on the basis of historical data for the cover and execution of future payment transactions. At the request of the Financial Supervision Authority, a payment institution is required to be able to justify the amount estimated of the basis of historical data.

(7) The Financial Supervision Authority may publish instructions which explain the principles for safekeeping and investment of the client funds provided in clause 2 of subsection 1 of this section.

(8) The provisions of this section do not apply to payment institutions which only provide payment services specified in clauses 7 and 8 of subsection 1 of § 3 of this Act.

§ 80. Requirements for e-money institutions for investment and safekeeping of assets

(1) An e-money institution is required to keep the funds which have been received upon issue of e-money and which are equal to the amount of financial liabilities related to the e-money held by the e-money holder:

1) separate from its own assets and assets related to the areas of activity which are not related to the provision of e-money services;

2) in a separate account with a credit institution or in an account opened in Eesti Pank in compliance with the rules and conditions established by Eesti Pank or invest the funds in liquid low-risk instruments.

(2) The client funds transferred to the possession of an e-money institution upon issue of e-money as well as assets acquired on account of such assets belong to the client and are not included in the bankruptcy estate of the e-money institution and the claims of other creditors of the e-money institution are not satisfied on account of such assets.

(3) Instead of the obligation provided in subsection 1 of this section, the client funds transferred to the possession of an e-money institution may be covered by an insurance contract or an equivalent guarantee contract by an insurance undertaking or credit institution, which does not belong to the same consolidation group as the e-money institution, to the extent equal to the amount which would have been segregated in the absence of the insurance contract or equivalent guarantee contract in the case the e-money institution is unable to meet its financial liabilities to the clients related to the issue of e-money.

(4) The liquid low-risk instruments specified in clause 2 of subsection 1 of this section are:

1) the debt securities specified in Article 336 of Regulation (EU) No 575/2013 of the European Parliament and of the Council, for which the specific risk capital charge is not higher than 1.6 per cent;

2) the units or shares of UCITS the assets of which are invested only in the debt instruments specified in clause 1 of this subsection.

(5) The Financial Supervision Authority has the right to decide on the basis of an evaluation of security, maturity, value or other risk element of the assets which instruments are not deemed to be liquid low-risk assets specified in subsection 4 of this section.

(6) Where an e-money institution provides payment services which are not related to the issue of e-money, the requirements for the safekeeping of assets by payment institutions provided in § 79 of this Act apply to the e-money institution in connection with such activities.

(7) The requirements for the safekeeping of assets provided in this section must be applied not later than as of the fifth working day after the date of issue of e-money unless otherwise provided by law.

§ 81. Organisation of accounting

(1) Accounting and reporting is organised pursuant to the requirements and relevant rules provided in this Act, the Accounting Act and other legislation and the articles of association and accounting policies and procedures of the payment institution or e-money institution.

(2) Accounting must provide truthful information relating to the business activities and the financial situation of the payment institution or e-money institution.

§ 82. Reports and submission thereof

(1) A payment institution or e-money institution prepares and submits reports to the Financial Supervision Authority pursuant to the procedure provided in this Act or legislation issued on the basis thereof.

(2) A payment institution or e-money institution submit to the Financial Supervision Authority the annual report, a copy of the sworn auditor's report, the proposal for and the resolution on the distribution of profits for the financial year and an extract of the minutes of the general meeting concerning the approval or refusal to approve the annual report within two weeks after the general meeting of shareholders.

(3) A payment institution or e-money institution subject to the exemption provided in subsection 1 or 2 of § 11 or subsection 1 of § 12 of this Act submits to the Financial Supervision Authority an overview on the number and total amount of payment transactions concluded or the volume of e-money services and liabilities related to the e-money services during a financial year within two weeks after the approval of the annual financial report.

(3¹) A payment institution subject to the exemption provided in subsection 3 of § 11 of this Act submits to the Financial Supervision Authority the annual financial report and the sworn auditor's report within two weeks after the approval thereof.

(4) The formats of reports of payment institutions to be submitted to the Financial Supervision Authority and the methods of preparation and the procedure for submission thereof are established by a regulation of the minister in charge of the policy sector.

(5) The formats of reports of e-money institutions to be submitted to the Financial Supervision Authority and the methods of preparation and the procedure for submission thereof are established by a regulation of the minister in charge of the policy sector.

(6) The formats of reports, methods of preparation and the procedure for submission of reports of branches of foreign payment institutions to be submitted to the Financial Supervision Authority may be established by a regulation of the minister in charge of the policy sector.

(7) The formats of reports, methods of preparation and the procedure for submission of reports of branches of foreign e-money institutions to be submitted to the Financial Supervision Authority may be established by a regulation of the minister in charge of the policy sector.

(8) The period for the regular reports to be submitted to the Financial Supervision Authority for supervision purposes is one quarter. A payment institution or e-money institution submits the regular report to the Financial Supervision Authority within 20 days after the end of the reporting period. Where the last date of submission of the report falls on a day off, the report may be submitted not later than on the working day following the day off.

(8¹) The minister in charge of the policy sector may establish by a regulation a reporting period exceeding that which has been provided in subsection 8 of this section for a payment institution subject to the exemption specified in subsections 1–3 of § 11 of this Act.

(9) Based on the reports provided in this section to be submitted to the Financial Supervision Authority, information may also be submitted as appropriate to the Ministry of Finance for the performance of duties arising from the Government of the Republic Act, and to Eesti Pank for the performance of duties arising from law.

(10) In addition to the provisions of this section, the Financial Supervision Authority has the right to request specific or regular reports and information necessary for the exercise of supervision to the extent provided by this Act.

(11) Eesti Pank has the right to request additional specific or regular reports from the persons specified in this section for the performance of duties arising from the Eesti Pank Act and the Payment and Settlement Systems Act. The formats of reports, methods of preparation and the procedure for submission of reports is established by Eesti Pank.

§ 82¹. Verification of reports submitted for supervision purposes and elimination of deficiencies

(1) The Financial Supervision Authority verifies the compliance of the reports submitted for supervision purposes with the requirements immediately after the receipt of the reports.

(2) Where the Financial Supervision Authority discovers deficiencies in a report submitted for supervision purposes, the Financial Supervision Authority immediately notifies the person who submitted the report thereof.

(3) In the case provided in subsection 2 of this section, the person who submitted the report for supervision purposes is required to eliminate the deficiencies and submit the adjusted report to the Financial Supervision Authority. The adjusted report must be submitted to the Financial Supervision Authority also in the case the person who submitted the report discovers an error in the information submitted earlier or the accounting policies of the previous accounting periods have changed.

(4) The person who submitted the report for supervision purposes is required to preserve the documents which are the source of information used in the preparation of the report for at least five years.

§ 83. Disclosure of reports

(1) The annual report must be available at the registered office of the payment institution or e-money institution, in all the branches of the payment institution or e-money institution and on the website of the payment institution or e-money institution. In the case the payment institution or e-money institution does not have its own website, the payment institution or e-money institution submits the report subject to disclosure to the Financial Supervision Authority for its disclosure on the website of the Financial Supervision Authority.

(2) A branch of a foreign payment institution or foreign e-money institution discloses the annual report which has been prepared according to the legislation of the country of the registered office of the payment institution or e-money institution and translated into Estonian.

(3) The annual report is disclosed within six months after the end of the financial year.

(4) The list of information subject to additional disclosure, the formats of reports, methods of preparation and the deadlines for the disclosure of reports of payment institutions and e-money institutions may be established by a regulation of the minister in charge of the policy sector.

§ 84. Audit

(1) The annual accounts of a payment institution or e-money institution must be audited.

(2) In the course of auditing a payment institution or e-money institution, an auditor must audit the following areas and submit to the payment institution or e-money institution and the Financial Supervision Authority an opinion on these areas:

1) the compliance of the results of valuation of assets with the actual value of the assets;

2) the compliance with the requirements established with regard to own funds and liability insurance;

3) the sufficiency and efficiency of the internal control measures;

4) security of the information and communication technology systems.

(3) In addition to the provisions of subsection 2 of this section, the payment institution must submit to the Financial Supervision Authority the special report of the auditor concerning the payment services and the provision of the services specified in subsection 2 of § 5 of this Act, in particular the payment volume, amount and fees. The report is submitted to the Financial Supervision Authority together with the annual report.

§ 85. Appointment of auditor

(1) A trustworthy person with adequate expertise and experience to audit payment institutions or e-money institutions may be appointed auditor.

(2) The auditor of a payment institution or e-money institution may be appointed to conduct a single audit or for a specific time limit which must not exceed five years. It is prohibited to appoint an auditor appointed for five years for an immediately subsequent period.

(3) An auditor is appointed by a court of the registered office of the payment institution or e-money institution on the basis of a petition of the Financial Supervision Authority where:

1) the general meeting has not appointed an auditor;

2) the auditor appointed by the general meeting refuses to conduct an audit;

3) in the opinion of the Financial Supervision Authority, the auditor is no longer trustworthy.

(4) The authority of a court-appointed auditor continues until appointment of a new auditor by the general meeting.

§ 86. Notification obligation of auditor

(1) An auditor is required to notify the Financial Supervision Authority immediately in writing of any circumstances of which the auditor becomes aware in the course of conducting an audit of a payment institution or e-money institution and which result or may result in:

1) material violation of legislation regulating the activities of payment institutions or e-money institutions;

2) interruption of the activities of the payment institution or e-money institution or a subsidiary thereof;

3) an adverse report by the auditor or a qualified report by the sworn auditor concerning the annual accounts;

4) a situation or the risk of a situation arising, in which the payment institution or e-money institution is unable to perform its obligations;

5) an act by a manager or employee of the payment institution or e-money institution causing significant proprietary damage to the payment institution or e-money institution or to a client thereof.

(2) An auditor is required to notify the Financial Supervision Authority immediately in writing of any circumstances of which the auditor becomes aware in the course of conducting an audit of a person which has a close link with a payment institution or e-money institution and which result or may result in the circumstances provided in subsection 1 of this section.

(3) Communication of information to the Financial Supervision Authority according to subsection 1 of this section does not violate the confidentiality requirement which is imposed on the auditor by legislation or a contract.

§ 87. Dissolution

(1) A payment institution or e-money institution is dissolved pursuant to the procedure provided in the Commercial Code, unless otherwise provided by this Act.

(1¹) An authorisation of the Financial Supervision Authority is required for the dissolution of a payment institution or an e-money institution (hereinafter in this section dissolution).

(1²) In order to obtain an authorisation for dissolution, the payment institution or e-money institution submits to the Financial Supervision Authority an application to which the following information and documents are appended:

1) the resolution of the general meeting of the payment institution or e-money institution concerning the dissolution and the application for authorisation therefor;

2) an assessment of the effect of the dissolution on the interests of their clients or other creditors by the payment institution or e-money institution.

(1³) The provisions of § 17 of this Act apply to the processing of an application for authorisation for dissolution, verification of the submitted information and verification of whether the dissolution of the payment institution or e-money institution corresponds to the interests of the clients or other creditors.

(1⁴) The decision to grant or refuse to grant an authorisation for the dissolution is made by the Financial Supervision Authority within one month after the submission of all the necessary documents and information but not later than within two months after the receipt of the corresponding application.

(1⁵) The Financial Supervision Authority may refuse to grant an authorisation for dissolution where the dissolution is contrary to the interests of the clients or other creditors of the payment institution or e-money institution.

(1⁶) The Financial Supervision Authority immediately informs the payment institution or e-money institution of a decision to grant or refuse to grant an authorisation for dissolution.

(2) A payment institution or e-money institution may undergo compulsory dissolution on the basis of a petition of the Financial Supervision Authority by a court ruling in the case the Financial Supervision Authority has withdrawn an authorisation or permission granted to the payment institution or e-money institution pursuant to § 22 of this Act.

(3) Evidence concerning circumstances provided in § 22 of this Act must be submitted to the court together with a petition.

(4) A court decides on the compulsory liquidation of a payment institution or e-money institution within three working days after submission of the corresponding petition.

(5) A ruling on compulsory dissolution is subject to immediate execution, and the filing of and proceedings regarding an appeal do not suspend the activities of liquidators.

(6) The provisions of subsection 3 of § 366 of the Commercial Code do not apply in the case specified in subsection 2 of this section.

§ 88. Bankruptcy

(1) A bankruptcy petition against a payment institution or an e-money institution may be submitted by:

1) the Financial Supervision Authority;

2) the liquidators;

3) the creditors.

(2) An operating payment institution or e-money institution which is a debtor may file a bankruptcy petition only with the written consent of the Financial Supervision Authority.

(3) A payment institution or e-money institution immediately notifies the Financial Supervision Authority of a bankruptcy petition filed against the payment institution or e-money institution.

(4) In the bankruptcy proceedings of a payment institution or e-money institution, claims are satisfied according to the rankings provided in the Bankruptcy Act, unless otherwise provided in this section.

(5) In the event of the bankruptcy of a payment institution to which the provisions of subsection 3 of § 79 of this Act apply or in the event of the bankruptcy of an e-money institution, the claims of the creditors are satisfied in the following rankings:

1) accepted claims secured by a pledge which were filed within the specified time limit, to the extent provided in subsection 2 of § 153 of the Bankruptcy Act;

2) accepted claims from clients which were filed within the specified time limit;

3) other accepted claims which were filed within the specified time limit;

4) claims which were not filed within the specified time limit but were accepted.

§ 90. Scope of supervision

(1) The supervision activities of the Financial Supervision Authority cover:

1) all payment institutions and e-money institutions whose registered office is in Estonia, including their agents and distributors;

2) branches of Estonian payment institutions or e-money institutions founded in foreign states, in the case they are not supervised by foreign financial supervision authorities or in the case a corresponding agreement has been concluded with the corresponding foreign financial supervision authority;

3) branches of foreign payment institutions or e-money institutions founded in Estonia, unless otherwise agreed with the financial supervision authority of the corresponding foreign state;

5) companies belonging to the same consolidation group as a payment institution or e-money institution.

(2) The Financial Supervision Authority exercises supervision upon verifying the liquidity and reporting of a branch of a payment institution or e-money institution of a Contracting State in co-operation with the financial supervision authority of the home state of the payment institution or e-money institution.

§ 91. Functions and rights of and measures applied by Financial Supervision Authority

(1) In the exercise of supervision, the Financial Supervision Authority:

1) decides on the grant, amendment and withdrawal of authorisations provided in this Act;

2) verifies everything relating to the acquisition, increase or reduction of holdings;

3) grants permission or consent in the cases provided in this Act or performs the registrations and approvals provided in this Act;

4) monitors, upon verification of the reports and other documents and upon performance of on-site inspections, whether the activities of the payment institution or e-money institution comply with law;

5) issues mandatory precepts and issues orders when necessary;

6) performs other functions arising from this Act and legislation issued on the basis thereof.

(2) When exercising supervision over compliance with the requirements of Regulation (EU) No 2022/2554 of the European Parliament and of the Council, the Financial Supervision Authority has all the rights provided in the specified Regulation, this Act and the Financial Supervision Authority Act. The Financial Supervision Authority publishes on its website, in accordance with the provisions of Article 54 of the Regulation, the decision made with regard to the violation of the obligation provided in the Regulation.

§ 91¹. Functions of Financial Supervision Authority upon ensuring comparability of representative payment services related to payment accounts

(1) In order to ensure comparability of the fees for representative payment services related to payment accounts, the Financial Supervision Authority:

1) prepares a provisional list of representative payment services related to payment accounts in accordance with the guidelines published by the European Banking Authority regarding payment services subject to a fee;

2) submits to the European Commission at the request thereof additional information on the data and criteria serving as the basis for the preparation of the provisional list of representative payment services;

3) establishes with instructions the final list of representative payment services related to payment accounts based on the standardised terms of representative payment services developed by the European Banking Authority (hereinafter list of representative payment services) and publishes such list;

4) assesses and, where necessary, updates the list of representative payment services and the corresponding instructions every four years;

5) submits to the European Banking Authority and the European Commission the outcome of the assessment specified in clause 4 of this subsection and, where applicable, of the updated list of representative payment services;

6) operates a website comparing at least the fees for payment services provided in the list of representative payment services (hereinafter comparison website).

(2) Consumers must have access to the comparison website free on charge and the comparison website must:

1) treat payment service providers equally in search results;

2) set out clear and objective criteria on which the comparison is based;

3) provide information in a clear and unambiguous manner and use the standardised terms used in the list of representative payment services;

4) provide accurate and up-to-date information and state the time of the last update;

5) include a broad range of offers of representative payment services covering a significant part of the market;

6) provide the consumer with the opportunity to report incorrect information on published fees through the comparison website.

(3) Where the information presented in clause 5 of subsection 2 of this section is not a complete overview of the market, a clear statement to that effect, before displaying results, must be provided to the consumer.

§ 92. Supervision over payment institutions and e-money institutions which have branches in foreign states and payment institutions and e-money institutions providing cross-border services

(1) Where a payment institution or e-money institution which has founded a branch in a foreign state or which provides cross-border services in a foreign state violates the requirements of legislation established in a foreign state, the Financial Supervision Authority immediately applies measures for termination of the violation on the proposal of the foreign financial supervision authority. The Financial Supervision Authority informs the foreign financial supervision authority of the applied measures.

(1¹) The Financial Supervision Authority may prohibit, by a precept, provision of services by a payment institution or e-money institution through a branch founded in a foreign state or in any other manner in the case:

1) any of the circumstances specified in subsection 5 of § 29 of this Act become evident;

2) the financial supervision authority of the foreign state has informed the Financial Supervision Authority that the payment institution or e-money institution has committed a violation of the requirements provided in the legislation of the foreign state or set by the financial supervision authority of the foreign state.

(1²) The Financial Supervision Authority immediately delivers the precept specified in subsection 1¹ of this section to the payment institution or e-money institution. A payment institution or e-money institution is required to terminate the provision of services in that foreign state through a branch or through any other manner by the due date specified by the Financial Supervision Authority.

(2) The Financial Supervision Authority immediately informs the financial supervision authority of the foreign state where the branch of the payment institution or e-money institution is founded or where the payment institution or e-money institution provides cross-border services of withdrawal of an authorisation of the payment institution or e-money institution or an authorisation for the foundation of a branch in a foreign state, or a precept specified in subsection 1¹ of this section.

(3) A branch of a payment institution or e-money institution or a payment institution or e-money institution which provides cross-border services must, at the request of a foreign financial supervision authority, submit information which is necessary for the exercise of supervision over the activities of the branch, payment institution or e-money institution in the state.

§ 93. Supervision over branches of foreign payment institutions and e-money institutions founded in Estonia and payment institutions and e-money institutions providing cross-border services in Estonia

(1) The Financial Supervision Authority may demand that a foreign payment institution or e-money institution which provides services in Estonia submit reports, additional information and documents necessary for the exercise of supervision over the payment institution or e-money institution to the extent provided by this Act, and also data necessary for collection of statistical information. The Financial Supervision Authority may demand a payment institution or e-money institution of a Contracting State to submit reports in accordance with the provisions of the European Commission Implementing Regulation adopted on the basis of Article 29(6) and (7) of Directive 2015/2366/EU of the European Parliament and of the Council.

(2) A payment institution or e-money institution which provides services in Estonia and whose authorisation has been suspended or withdrawn by a foreign financial supervision authority may not continue to operate or provide cross-border services in Estonia.

(3) Where a payment institution or e-money institution of a third country which provides services in Estonia violates the requirements provided in this Act or other legislation, the Financial Supervision Authority may apply measures and sanctions necessary for the termination of the violation or withdraw the authorisation for the foundation of a branch or for the provision of cross-border services.

(4) The Financial Supervision Authority may demand that a payment institution or e-money institution of a Contracting State which has founded a branch is Estonia or provides cross-border services in Estonia terminate violation of the requirements provided in Acts or legislation established on the basis thereof.

(5) Where a payment institution or e-money institution of a Contracting State specified in subsection 4 of this section continues to violate the requirements provided in legislation, the Financial Supervision Authority informs the financial supervision authority of the home state thereof.

(6) Where the measures applied by a financial supervision authority of a Contracting State are insufficient and a payment institution or e-money institution of the Contracting State continues to violate the requirements provided in legislation, the Financial Supervision Authority may, by its precept, apply measures provided in this Act for the termination of the violation or prohibit the activities of or provision of cross-border services by the payment institution or e-money institution of the Contracting State in Estonia and informs the financial supervision authority of the home state, the European Banking Authority, the European Commission and, where necessary, the financial supervision authorities of other Contracting States thereof beforehand.

(7) The Financial Supervision Authority informs the foreign payment institution or e-money institution of the measures applied pursuant to this section. A complaint against measures applied by the Financial Supervision Authority may be filed through a branch of the foreign payment institution or e-money institution with a court of its registered office.

(8) The Financial Supervision Authority may, in order to protect clients and creditors of a payment institution or e-money institution, and the public interest, including in the case of material violation of the Money Laundering and Terrorist Financing Prevention Act, apply measures provided by law with regard to a payment institution or e-money institution of a Contracting State without prior notice. In such a case, a financial supervision authority of the home state, the European Banking Authority and the European Commission are immediately informed after the implementation of the measures. Measures are applied until the need to apply such measures ceases to exist.

§ 94. Rights and obligations of party to proceedings in supervision proceedings

(1) Where necessary, the Financial Supervision Authority explains to parties to proceedings their rights and obligations in supervision proceedings.

(2) Parties to proceedings have the right to access the information concerning themselves and collected by the Financial Supervision Authority, and to copy or make extracts of such data. The Financial Supervision Authority has the right to refuse to provide such information to parties to proceedings where this damages or may damage the justified interests of third parties, or where examining the information damages attainment of the objectives of the supervision or ascertainment of the truth in criminal proceedings.

(3) In supervision proceedings, a party to proceedings has the right to submit questions to witnesses through the Financial Supervision Authority. The Financial Supervision Authority has the right to refuse to forward questions to witnesses with good reason in the case the questions are irrelevant or in order to prevent violation of the rights or interests of witnesses.

(4) Where, in the course of administrative proceedings, a party to proceedings fails to appear upon a summons by the Financial Supervision Authority without a legal impediment, the Financial Supervision Authority has the right to:

1) impose non-compliance levy to the party to proceedings;

2) apply compelled attendance by a police escort.

§ 95. Rights of Financial Supervision Authority upon receipt of information

(1) In order to exercise supervision, the Financial Supervision Authority has the right to demand the submission of reports, information, documents and oral or written explanations without charge concerning facts relevant to the exercise of supervision from the following persons:

1) payment institutions and e-money institutions, managers and employees of payment institutions and e-money institutions;

2) managers and employees of companies belonging to the same consolidation group as payment institutions or e-money institutions;

3) shareholders of payment institutions and e-money institutions;

3¹) agents or distributors of payment institutions and e-money institutions;

4) in case of justified need, third parties;

5) liquidators and trustees in bankruptcy of payment institutions and e-money institutions;

6) state and municipal authorities, general national registers, national registers and the controllers and processors of state databases.

(2) For the purposes of supervision activities, the Financial Supervision Authority has the right to:

1) carry out on-site inspections of companies belonging to the same consolidation group as a payment institution or e-money institution in order to verify information submitted to the Financial Supervision Authority, and to demand submission of information and documents necessary for the exercise of supervision;

2) demand submission of any information from a payment institution or e-money institution necessary for verification of compliance with prudential requirements;

3) receive information from internal auditors of payment institutions and e-money institutions and co-operate with them.

(3) Where necessary, the Financial Supervision Authority may require that a person appear at the offices of the Financial Supervision Authority at the time designated by the Financial Supervision Authority in order to provide explanations.

(4) For the purposes of supervision, the Financial Supervision Authority has the right to receive information related to a payment institution or e-money institution from a third party without informing the payment institution or e-money institution of communication of the information. The third party is required not to inform the payment institution or e-money institution of communication of such information.

(5) Where necessary, the Financial Supervision Authority may issue an order whereby the Financial Supervision Authority designates a time limit for the performance of obligations provided in subsections 1–3 of this section.

(5¹) The Financial Supervision Authority explains to the persons specified in subsections 1–3 of this section the purposes of requesting information, provided that it does not have an adverse effect on exercising supervision.

(6) In order to exercise supervision, the Financial Supervision Authority has the right to receive from credit institutions information which contains banking secrets concerning a payment institution, e-money institution and the clients thereof, and a third party to whom the functions of a payment institution or e-money institution have been outsourced.

§ 96. Bases for refusal to provide explanations

A person obligated to provide explanations may refuse to provide explanations to the Financial Supervision Authority on the bases provided in §§ 71 or 73 of the Code of Criminal Procedure.

§ 97. On-site inspection

(1) In order to exercise supervision, the Financial Supervision Authority has the right to carry out on-site inspections at the registered office or place of business of the following persons (hereinafter in this Chapter person being inspected):

1) payment institutions and e-money institutions;

2) companies belonging to the same consolidation group as the payment institution or e-money institution;

3) paying agents;

4) persons to whom operational functions or activities have been outsourced according to § 62 of this Act.

(2) An on-site inspection is carried out in the case:

1) it is necessary to verify the submitted information;

2) the Financial Supervision Authority suspects that the provisions of this Act or other legislation specified in subsection 1 of § 2 of the Financial Supervision Authority Act, or provisions established on the basis thereof have been violated;

3) it is necessary based on a request by a financial supervision authority of a Contracting State;

4) it is necessary to perform duties of supervision.

(3) In order to carry out an on-site inspection, the Financial Supervision Authority issues an order which sets out the purpose, extent, duration of the period and time of the inspection. The order is delivered to the person to be inspected at least three working days before the inspection is commenced, unless giving such notice damages attainment of the objectives of the inspection. An on-site inspection is carried out by an employee authorised by the Financial Supervision Authority (hereinafter in this Chapter inspector), unless otherwise prescribed in this Act.

(4) In the course of an on-site inspection, inspectors have the right to:

1) enter all premises and take possession of information in compliance with the security requirements in force with regard to the person being inspected;

2) request existence of necessary working conditions and use a separate room necessary for their work;

3) study documents and media necessary for exercising supervision, make excerpts and copies thereof and monitor the work processes without restrictions;

4) obtain oral and written explanations from the managers and employees of the person being inspected. Minutes are taken of the explanations when necessary or at the request of the person providing the explanations.

(5) The management board of a person being inspected is required to appoint a competent representative in whose presence the inspection is carried out and who provides the inspector with documents and other information necessary for the performance of their duties, including the sworn auditor's report concerning the reports of the person being inspected and the special reports of the auditor, and provide necessary explanations with regard to such documents and information.

(6) In the case specified in clause 3 of subsection 2 of this section, the Financial Supervision Authority may authorise a financial supervision authority of a Contracting State or an auditor or expert appointed by it to perform on-site inspections.

§ 98. Report concerning on-site inspection

(1) An inspector is required to prepare a report concerning the results of an on-site inspection within three months after completion of the inspection and the Financial Supervision Authority immediately delivers the report to the person being inspected.

(2) A person being inspected has the right to provide written explanations within one month after the date of delivery of the report.

(3) After reviewing the written explanations of the person being inspected, but not later than within five months after the on-site inspection is completed, the Financial Supervision Authority prepares a final report which is delivered to the person being inspected.

(5) Where, after the on-site inspection or the written explanations of the person being inspected, circumstances requiring additional assessment become evident or the Financial Supervision Authority obtains additional information, the time limit for preparation of the report of the Financial Supervision Authority specified in subsection 1 or a final report specified in subsection 3 of this section may be extended by up to two months. Where significant amendments are made to the final report during this period, the Financial Supervision Authority sends it to the person being inspected again for written explanations.

(6) The Financial Supervision Authority may, by a final report, set a time limit for elimination of the deficiencies for the person being inspected or impose other obligations on the person being inspected and impose a non-compliance levy in the event of failure to comply with the obligations or inappropriate compliance with the obligations.

(7) The Financial Supervision Authority has the right to publish the final report concerning the on-site inspection, or any part of the final report, where this is necessary in the interest of investors and the clients of the subject of financial supervision and for ensuring the stability and transparency of the financial sector.

§ 99. Assessment and special audit in supervisory proceedings

(1) The Financial Supervision Authority may involve experts in proceedings in the cases where expertise is required to ascertain facts which are relevant to the matter.

(2) The Financial Supervision Authority has the right to demand a special audit in the case:

1) there is reasonable doubt that the reports or information submitted to the Financial Supervision Authority or the public are misleading or inaccurate;

2) transactions have been concluded which may result or have resulted in significant damage to the payment institution or e-money institution, a company belonging to the consolidation group of the payment institution or e-money institution, or clients;

3) other issues relevant to the financial situation of a payment institution or e-money institution or a company belonging to the consolidation group of the payment institution or e-money institution need additional clarification in the supervision proceedings.

(3) The Financial Supervision Authority involves an expert or, for a special audit, an auditor on its own initiative or at the request of a party to proceedings. The name of an expert or auditor and the reasons for involvement of the expert or auditor are communicated to a party to proceedings before involvement of the expert or auditor, unless proceedings regarding the matter need to be conducted quickly or communication of the information may impede attainment of the objectives of the assessment or special audit.

(4) Where an expert or auditor who performs a special audit ascertains facts relevant in the supervision proceedings and the Financial Supervision Authority did not directly assign the task of ascertaining these facts to the expert or auditor, the expert or auditor also provided their opinion or assessment with regard to the facts.

(5) An expert or auditor who performs a special audit has the right to exercise the rights provided in subsection 4 of § 97 of this Act only for the purpose of performance of the tasks assigned to them and make proposals to the Financial Supervision Authority and parties to proceedings for the submission of additional information and documents. The expert or auditor who performs the special audit may exercise the right provided in subsection 4 of § 97 of this Act only with the permission or in the presence of the person being inspected. The expert is required to maintain the confidentiality of any confidential information which becomes known to the expert in connection with performance of the tasks specified in this section.

(6) Costs related to the conduct of an assessment or a special audit are covered by the Financial Supervision Authority. Where an expert or auditor is involved at the request of a party to proceedings, costs related to the conduct of an assessment or a special audit are covered by the party to proceedings.

§ 100. Precept

(1) The Financial Supervision Authority has the right to issue a precept where:

1) violations of the requirements of Acts and legislation established on the basis thereof are discovered as a result of supervision;

2) there is a need to prevent the offence specified in clause 1 of this subsection;

3) the risks assumed by a payment institution or e-money institution have increased significantly or where other circumstances emerge which endanger or may endanger the activities of the payment institution or e-money institution, the interests of the clients thereof or the soundness of the financial system or currency circulation;

4) Eesti Pank has made a proposal to take measures in the case provided in the Payment and Settlement Systems Act.

(2) The recipient of a precept must, immediately after being notified of the precept, commence compliance with the precept.

(3) The filing of an appeal against a precept and proceedings regarding the appeal do not suspend the requirement to comply with the precept, unless otherwise provided by the Financial Supervision Authority.

§ 101. Rights upon issue of precepts

(1) The Financial Supervision Authority has the right, by issuing a precept, to:

1) prohibit certain transactions or activities from being conducted or to establish restrictions on their volume;

2) prohibit, in whole or in part, payments from the profit of a payment institution or e-money institution;

3) demand restrictions on the operating expenses of a payment institution or e-money institution;

4) demand amendment of the internal rules of a payment institution or e-money institution;

5) demand removal of the manager of a payment institution or e-money institution;

6) propose to the general meeting of a payment institution or e-money institution for the change of auditor of the payment institution or e-money institution;

7) demand suspension of an employee of a payment institution or e-money institution from work;

8) demand that the right to provide services granted to an agent or distributor by a payment institution or e-money institution be withdrawn;

9) demand that the ratio of liquid assets and current liabilities be brought into compliance with this Act or legislation issued on the basis thereof;

10) make other demands for compliance with legislation regulating the operation of payment institutions or e-money institutions.

(2) Upon failure to comply with a precept of the Financial Supervision Authority, the Financial Supervision Authority may, in addition to the provisions of § 106 of this Act, apply other measures prescribed by this Act, including:

1) withdrawal of the authorisation of a payment institution or e-money institution;

2) withdrawal of the authorisation for the foundation of a branch;

3) demand removal of the manager of a payment institution or e-money institution by a court.

§ 101¹. Rights upon issue of precepts in case of violation of obligations provided in Law of Obligations Act

In the case of violation of the obligations provided in §§ 710¹, 711, 711¹, 711³, 711⁵, 711⁶, 718¹, 720¹, 721¹–721⁴, subsection 1 of § 721⁵ and §§ 727 and 727¹ of the Law of Obligations Act, the Financial Supervision Authority has the right to issue a precept to the payment service provider on the basis provided in §§ 100 and 101 of this Act.

§ 102. Calling meetings of managing bodies

(1) The management board of a payment institution or e-money institution must notify the Financial Supervision Authority of a general meeting or a meeting of the supervisory board at least two weeks in advance. Notice of a special general meeting must be given at least one week in advance, where possible.

(2) The Financial Supervision Authority has the right to issue a precept:

1) to call a meeting of the management board or supervisory board of a payment institution or e-money institution or to call the general meeting of a payment institution or e-money institution;

2) to include an issue on the agenda of a meeting of the management board or supervisory board or the general meeting where this is necessary in the opinion of the Financial Supervision Authority.

(3) The Financial Supervision Authority has the right to send representatives to a meeting who have the right to present positions and make proposals and demand the recording thereof in the minutes of the meeting.

§ 103. Invalidation of resolution of managing body at request of Financial Supervision Authority

On the basis of a petition of the Financial Supervision Authority, a court of the registered office of a payment institution or e-money institution may declare invalid a resolution of the general meeting, supervisory board or management board which is in conflict with an Act, legislation issued on the basis thereof or the articles of association, provided that the petition is submitted within three months after adoption of the resolution.

§ 104. Obligation to notify Financial Supervision Authority

(1) A payment institution or e-money institution is required to notify the Financial Supervision Authority immediately of any changes to the information or circumstances which constituted the basis for the grant of the authorisation of the payment institution or e-money institution, and to submit the following information and documents:

1) the business name or address of the registered office of the payment institution or e-money institution or, in the case of changes in contact details, the new business name, address of the registered office, and contact details;

2) upon changes in the articles of association, the amendments to and the amended text of the articles of association;

3) upon changes in the procedure or rules determined by the internal rules, the amended internal rules;

4) upon a change of managers, information specified in clause 14 of subsection 1 of § 15 of this Act;

5) upon a change of auditors, information specified in clause 16 of subsection 1 of § 15 of this Act;

6) circumstances which affect or may significantly affect the financial situation of the payment institution or e-money institution;

7) other information where so prescribed by this Act.

(2) At the request of the Financial Supervision Authority, a payment institution or e-money institution must immediately disclose the information and documents specified in subsection 1 of this section, except those specified in clauses 3 and 6.

(3) The Financial Supervision Authority publishes the information specified in clause 1 of subsection 1 of this section on its website.

§ 105. List

(1) The Financial Supervision Authority maintains a list of:

1) payment institutions and e-money institutions which are registered in Estonia and hold a valid authorisation;

2) persons having a qualifying holding in a payment institution or e-money institution registered in Estonia;

3) agents and distributors;

4) managers of the persons specified in clause 1 of this subsection;

5) branches founded abroad by payment institutions or e-money institutions registered in Estonia;

6) branches founded in Estonia by foreign payment institutions or e-money institutions;

7) payment institutions and e-money institutions providing cross-border services in Estonia;

8) mergers of payment institutions and mergers of e-money institutions;

9) exemptions applied to payment institutions on the basis of subsections 1–3 of § 11 and subsection 1 of § 12 of this Act;

10) persons who submitted the notices specified in subsections 1 and 3 of § 4¹ of this Act and the services described in the notices;

11) persons whose authorisation for provision of payment services or e-money services has been withdrawn.

(2) The information specified in this section is published pursuant to the provisions of subsection 4 of § 53 of the Financial Supervision Authority Act.

§ 106. Non-compliance levy

(1) In the event of failure to comply or inappropriate compliance with a precept of the Financial Supervision Authority issued pursuant to this Act or another administrative decision, the Financial Supervision Authority has the right to impose a non-compliance levy pursuant to the procedure provided in the Substitutional Performance and Non-Compliance Levies Act.

(2) In the event of non-compliance or inappropriate compliance with an administrative decision, the maximum amount of a non-compliance levy is up to 5,000 euros in the case of a natural person for the first occasion and up to 50,000 euros for subsequent occasions for the purpose of enforcing the same obligation, up to a total of 5,000,000 euros or up to twice the amount corresponding to the profits made or losses avoided as a result of the violation.

(3) In the event of non-compliance or inappropriate compliance with an administrative decision, the maximum amount of a non-compliance levy is up to 32,000 euros in the case of a legal person for the first occasion and up to 100,000 euros for subsequent occasions for the purpose of enforcing the same obligation, up to a total of 5,000,000 euros or up to ten per cent of the annual net turnover, including gross income, which in accordance with Regulation (EU) No 575/2013 of the European Parliament and of the Council consists of commission and fees and interest and similar income, or up to twice the amount of the profits made or losses avoided as a result of the violation. Where the legal person is a subsidiary of the parent undertaking, the total income referred to in the first sentence of this paragraph is the total income according to the consolidated annual report for the preceding financial year.

§ 107. Failure to submit information

(1) Failure to publish or submit to the Financial Supervision Authority a report, document, explanation or other information or data provided in this Act, untimely submission or submission or publication of incorrect, incomplete or misleading information or submission of information in a manner which does not permit exercise of supervision

is punishable by a fine of up to 5,000,000 euros or up to twice the amount corresponding to the profits made or losses avoided as a result of the misdemeanour.

(2) The same act, where committed by a legal person,

is punishable by a fine of up to 5,000,000 euros or up to twice the amount corresponding to the profits made or losses avoided as a result of the misdemeanour, or up to 10 per cent of the consolidated turnover of the legal person or its consolidation group.

§ 108. Violation of procedure for acquisition of qualifying holding

(1) Acquisition or transfer of a holding in a payment institution or e-money institution or turning a payment institution or e-money institution into a controlled company without giving prior notification to the Financial Supervision Authority according to this Act or in violation of the precept specified in subsection 2 of § 42 of this Act, and exercise of the right to vote or other rights enabling control in the payment institution or e-money institution in violation of the precept of the Financial Supervision Authority

is punishable by a fine of up to 5,000,000 euros or up to twice the amount corresponding to the profits made or losses avoided as a result of the misdemeanour.

(2) The same act, where committed by a legal person,

is punishable by a fine of up to 5,000,000 euros or up to twice the amount corresponding to the profits made or losses avoided as a result of the misdemeanour, or up to 10 per cent of the consolidated turnover of the legal person or its consolidation group.

§ 108¹. Violation of merger requirements

(1) Violation of the requirement to give notice of a merger provided in subsection 1 of § 55 of this Act or conclusion of a transaction without permission

is punishable by a fine of up to 700,000 euros or up to twice the amount corresponding to the profits made or losses avoided as a result of the misdemeanour.

(2) The same act, where committed by a legal person,

is punishable by a fine of up to 5,000,000 euros or up to twice the amount corresponding to the profits made or losses avoided as a result of the misdemeanour or up to three per cent of the consolidated turnover of the legal person or its consolidation group.

§ 109. Violation of requirements for internal rules and internal control

(1) Violation of the requirement to establish or the obligation to apply internal rules or measures required for internal control provided in this Act

is punishable by a fine of up to 5,000,000 euros or up to twice the amount corresponding to the profits made or losses avoided as a result of the misdemeanour.

(2) The same act, where committed by a legal person,

is punishable by a fine of up to 5,000,000 euros or up to twice the amount corresponding to the profits made or losses avoided as a result of the misdemeanour, or up to 10 per cent of the consolidated turnover of the legal person or its consolidation group.

§ 109¹. Violation of digital operational resilience requirements

(1) Violation of the requirements provided in Articles 5–14 or 16–18, Article 19(1) or (3)–(5), Article 24 or 25, Article 26(1)–(8), Article 27, Article 28(1)–(8), Article 29, Article 30(1)–(4) or Article 42(3) of Regulation (EU) No 2022/2554 of the European Parliament and of the Council

is punishable by a fine of up to 5,000,000 euros or up to twice the amount corresponding to the profits made or losses avoided as a result of the misdemeanour.

(2) The same act, if committed by a legal person,

is punishable by a fine of up to 5,000,000 euros or up to twice the amount corresponding to the profits made or losses avoided as a result of the misdemeanour, or up to 10 per cent of the consolidated turnover of the legal person or its consolidation group.

§ 110. Violation of obligations concerning outsourcing of activities related to services

(1) Violation of the requirements established in § 62 of this Act concerning the outsourcing of activities related to payment services and e-money services

is punishable by a fine of up to 5,000,000 euros or up to twice the amount corresponding to the profits made or losses avoided as a result of the misdemeanour.

(2) The same act, where committed by a legal person,

is punishable by a fine of up to 5,000,000 euros or up to twice the amount corresponding to the profits made or losses avoided as a result of the misdemeanour, or up to 10 per cent of the consolidated turnover of the legal person or its consolidation group.

§ 110¹. Violation of obligation to enter into liability insurance and guarantee contract

Violation of the obligation to enter into a liability insurance or guarantee contract provided in §63⁷ of this Act, including violation of the requirements provided in respect of the conditions of a liability insurance or guarantee contract, where committed by a legal person,

is punishable by a fine of up to 400,000 euros.

§ 110². Violation of requirements for entry into and cancellation of basic payment service contract

(1) Violation of the requirements for entry into a basic payment service contract provided in § 7101 or for cancellation of a basic payment service contract provided in § 7201 of the Law of Obligations Act, including violation of the requirement to establish or the obligation to implement measures, procedures or internal rules necessary for entry into or cancellation of a basic payment service contract

is punishable by a fine of up to 300 fine units.

(2) The same act, where committed by a legal person,

is punishable by a fine of up to 400,000 euros.

§ 110³. Violation of requirements for presentation, transparency and comparability of fees related to payment accounts

(1) Violation of the requirements for transparency and comparability of fees related to payment accounts provided in §§ 711³, 711⁶ or 718¹ of the Law of Obligations Act, including violation of the requirement to establish or the obligation to implement measures, procedures or internal rules necessary to ensure presentation, transparency and comparability of fees related to payment accounts

is punishable by a fine of up to 300 fine units.

(2) The same act, where committed by a legal person,

is punishable by a fine of up to 400,000 euros.

§ 110⁴. Violation of requirements for transfer of payment services

(1) Violation of the requirements for transfer of payment services provided in §§ 711⁵, 721¹–721⁴ or subsection 1 of § 721⁵ of the Law of Obligations Act, including violation of the requirement to establish or the obligation to implement measures, procedures or internal rules necessary to ensure transfer of payment services

is punishable by a fine of up to 300 fine units.

(2) The same act, where committed by a legal person,

is punishable by a fine of up to 400,000 euros.

§ 111. Violation of obligations of manager of payment institution and e-money institution

(1) Violation by a manager of a payment institution or e-money institution of the obligations provided in subsection 6 of § 47 of this Act resulting in failure or danger of failure to provide protection to the interests of the payment institution or e-money institution or clients thereof

is punishable by a fine of up to 5,000,000 euros or up to twice the amount corresponding to the profits made or losses avoided as a result of the misdemeanour.

(2) The same act, where committed by a legal person,

is punishable by a fine of up to 5,000,000 euros or up to twice the amount corresponding to the profits made or losses avoided as a result of the misdemeanour, or up to 10 per cent of the consolidated turnover of the legal person or its consolidation group.

§ 112. Violation of prudential requirements

Violation of the requirements for own funds or the requirements for the calculation of own funds, where committed by a legal person,

is punishable by a fine of up to 5,000,000 euros or up to twice the amount corresponding to the profits made or losses avoided as a result of the misdemeanour, or up to 10 per cent of the consolidated turnover of the legal person or its consolidation group.

§ 113. Violation of requirements for maintenance of payment accounts

(1) Violation of the requirements for the maintenance of payment accounts provided in this Act

is punishable by a fine of up to 300 fine units.

(2) The same act, where committed by a legal person,

is punishable by a fine of up to 400,000 euros.

§ 113². Violation of technical and business requirements for credit transfers and direct debits in euro

(1) Violation of requirements provided in Articles 3–9 of Regulation (EU) No 260/2012 of the European Parliament and of the Council

is punishable by a fine of up to 5,000,000 euros or up to twice the amount corresponding to the profits made or losses avoided as a result of the misdemeanour.

(2) The same act, where committed by a legal person,

is punishable by a fine of up to 5,000,000 euros or up to twice the amount corresponding to the profits made or losses avoided as a result of the misdemeanour, or up to 10 per cent of the consolidated turnover of the legal person or its consolidation group.

§ 113³. Violation of requirements for interchange fees for payment cards and rules for payment transactions

(1) Violation of the requirements provided in Articles 3–5, 8, 10 and 12 of Regulation (EU) No 2015/751 of the European Parliament and of the Council on interchange fees for card-based payment transactions (OJ L 123, 19.05.2015, pp 1–15)

is punishable by a fine of up to 5,000,000 euros or up to twice the amount corresponding to the profits made or losses avoided as a result of the misdemeanour.

(2) The same act, where committed by a legal person,

is punishable by a fine of up to 5,000,000 euros or up to twice the amount corresponding to the profits made or losses avoided as a result of the misdemeanour, or up to 10 per cent of the consolidated turnover of the legal person or its consolidation group.

§ 113⁴. Violation of requirements established for cross-border payments and conversion charges

(1) Violation of the requirements provided in Articles 3, 4, 5 or 6 of Regulation (EU) No 2021/1230 of the European Parliament and of the Council

is punishable by a fine of up to 300 fine units.

(2) The same act, where committed by a legal person,

is punishable by a fine of up to 400,000 euros.

§ 114. Violation of requirement for safekeeping and protection of assets of clients

(1) Violation of the requirements relating to the safekeeping or protection of the assets of clients provided in §§ 78–80 of this Act

is punishable by a fine of up to 5,000,000 euros or up to twice the amount corresponding to the profits made or losses avoided as a result of the misdemeanour.

(2) The same act, if committed by a legal person,

is punishable by a fine of up to 5,000,000 euros or an amount corresponding to twice the amount of the profits made or losses avoided as a result of the misdemeanour, or up to ten per cent of the consolidated turnover of the legal person or its consolidation group.

§ 116. Violation of requirements for activities of foreign payment institutions and e-money institutions

Provision of the service of a foreign payment institution or foreign e-money institution in Estonia without notifying the Financial Supervision Authority or violation of the requirements established in this Act for the activities of a foreign payment institution or foreign e-money institution, where committed by a legal person,

is punishable by a fine of up to 5,000,000 euros or up to twice the amount corresponding to the profits made or losses avoided as a result of the misdemeanour, or up to 10 per cent of the consolidated turnover of the legal person or its consolidation group.

§ 116². Turnover of legal person and consolidation group

The turnover of a legal person provided in this Chapter is the annual net turnover, including gross income, which in accordance with Regulation (EU) No 575/2013 of the European Parliament and of the Council consists of commission and fees, and interest and similar income, or up to twice the amount corresponding to the profits made or losses avoided as a result of the violation. Where the legal person is a subsidiary of the parent undertaking, the gross income referred to in the first sentence is the total income according to the consolidated annual report for the preceding financial year.

§ 116³. Limitation period

The limitation period of misdemeanours provided in this Chapter is three years.

§ 117. Proceedings

(2) The Financial Supervision Authority is the out-of-court proceedings authority for the misdemeanours provided in this Chapter.

§ 118

–

§ 127

[Omitted from this text.]

§ 129. Repeal of Electronic Money Institutions Act

[Omitted from this text.]

§ 130. Implementing provisions

(1) Regardless of the provisions of subsection 1 of § 728 of the Law of Obligations Act, a payer and a payment service provider of the payer may, until 1 January 2012, agree on a different time limit for the execution of a payment order which must not exceed three business days. Where the payment order is initiated on paper, the time limit specified in the first sentence of this subsection may be extended by one more business day.

(2) Persons who provided payment services or services equal to payment services before entry into force of this Act and who intend to continue operating in the corresponding field after entry into force of this Act must submit to the Financial Supervision Authority an application for an authorisation or for the exemption specified in § 13 of this Act not later than within nine months as of the entry into force of this Act. The provisions of the first sentence of this subsection do not apply to persons specified in clauses 2–6 of subsection 6 of § 3 of this Act.

(3) Persons who provided payment services or services equal to payment services before entry into force of this Act and who intend to continue operating in the corresponding field after entry into force of this Act, including credit institutions, must bring their activities and documents into compliance with the provisions of this Act within four months as of the entry into force of this Act. Until brought into compliance with this Act, the activities and documents of persons specified in the first sentence of this subsection must comply with the legislation in force until the entry into force of this Act.

(4) E-money institutions which hold a valid authorisation at the time this Act enters into force must bring their activities and documents into compliance with the provisions of this Act within one month as of the entry into force of this Act. Until brought into compliance with this Act, the activities and documents of e-money institutions must comply with the legislation in force until the entry into force of this Act.

(5) Persons who provided payment services or services equal to payment services for the purposes of this Act before entry into force of this Act may continue to provide such services without holding an authorisation provided in § 13 or an authorisation provided in § 14 of this Act until 30 April 2011.

(6) The Financial Supervision Authority may grant an authorisation of a payment institution to a person provided in subsection 5 of this section and add the person to the list of payment institutions provided in § 105 of this Act without applying the procedure for application for an authorisation, provided that the Financial Supervision Authority finds that the person complies with the requirements for application for an authorisation provided in this Act.

(7) A payment institution, e-money institution, branch of a foreign payment institution or e-money institution or person holding an authorisation provided in § 13 of this Act prior to the entry into force of this subsection who provided payment services or e-money services or services equal thereto but did not have an identification code specified in subsection 7 of § 14 of this Act before entry into force of this subsection may apply for an identification code and the right to use thereof from the Financial Supervision Authority at any time. The Financial Supervision Authority decides on the grant of an identification code and the right to use thereof within 30 calendar days from the receipt of a corresponding application.

(8) The Financial Supervision Authority establishes the list of representative payment services specified in clause 3 of subsection 1 of § 91¹ of this Act within three months after the delegated act concerning the technical standards developed by the European Banking Authority has entered into force.

(9) The Financial Supervision Authority submits to the Ministry of Finance at the latest by 1 September 2018 and thereafter in every two years the following information:

1) information on performance of the obligations provided in subsections 1–6 of § 711³, subsections 1–6 of § 718¹ and subsection 2 of § 7116 of the Law of Obligations Act;

2) upon transfer of a payment service specified in subsection 15² of § 709 of the Law of Obligations Act, the number of payment accounts transferred and the proportion of applications submitted for transfer and applications rejected;

3) the number of credit institutions providing basic payment services related to payment accounts for the purposes of subsection 15¹ of § 709 of the Law of Obligations Act, number of payment accounts opened and the proportion of applications submitted for opening a payment account and applications rejected.

(10) The provisions of the second sentence of subsection 1 of § 5 of this Act do not apply to a savings and loan association founded and operating before 31 January 2026 which holds an authorisation of a payment institution and continues its activities as a commercial association as of 1 January 2029.

§ 131. Bringing activities and documents of e-money institutions into compliance with wording of this Act passed on 16 June 2011

(1) E-money institutions which issued e-money before 30 April 2011 and intend to continue operating in the corresponding field after this date must bring their activities and documents into compliance with the requirements provided in §§ 6, 7, 12, 63, 64, 71 and 80 of the wording of this Act passed on 16 June 2011 (hereinafter this wording) at the latest by 30 October 2011. Until bringing into compliance with this wording, the activities and documents of e-money institutions must comply with regard to the aforementioned requirements with the legislation in force until the entry into force of this wording.

(2) The Financial Supervision Authority may add the e-money institution provided in subsection 1 of this section to the list of e-money institutions provided in § 105 of this Act without applying the procedure for application for an authorisation and the procedure for calculation of share capital and own funds provided by this wording, provided that the Financial Supervision Authority finds that the e-money institution complies with the new requirements provided by this wording.

(3) Companies which issued e-money before 30 April 2011 and on the basis of the exemption provided in § 12 of the Payment Institutions and E-money Institutions Act in force until the entry into force of this wording and which intend to continue operating in the corresponding field after the aforementioned date must bring their activities and documents into compliance with the requirements of this wording at the latest by 30 April 2012. Until bringing into compliance with this wording, the activities and documents of companies must comply with the legislation in force until the entry into force of this wording.

§ 132. Bringing activities and documents of payment institutions and e-money institutions into compliance with wording of this Act which entered into force on 13 January 2018

(1) Payment institutions which provided payment services before 13 January 2018 and intend to continue operating in the corresponding field after this date must bring their activities and documents into compliance with the wording of this Act which entered into force on 13 January 2018 (hereinafter wording of 13 January 2018) by 13 July 2018. Until bringing into compliance with the wording of 13 January 2018, the activities and documents of payment institutions must comply with the legislation in force until 13 January 2018.

(2) Payment institutions which provided the payment service provided in clause 7 of subsection 1 of § 3 of the wording of this Act valid before 13 January 2018 may provide the payment service provided in clause 3 of subsection 1 of § 3 of the wording of 13 January 2018 until 13 January 2020 in compliance with the prudential requirements valid before 13 January 2018. The above payment institutions may continue to provide the payment service provided in clause 3 of subsection 1 of § 3 of the wording of 13 January 2018 after 13 January 2020, provided that the payment institution submits information to the Financial Supervision Authority that it complies with the requirements of Chapter 8 of the wording of 13 January 2018. In such a case, an authorisation granted to a payment institution for the provision of the payment service specified in clause 7 of subsection 1 of § 3 of the wording of this Act valid before 13 January 2018 is deemed to be an authorisation for the provision of the service specified in clause 3 of subsection 1 of § 3 of the wording of 13 January 2018.

(3) E-money institutions which issued e-money before 13 January 2018 and intend to continue operating in the corresponding field after this date must bring their activities and documents into compliance with the wording of 13 January 2018 by 13 July 2018. Until bringing into compliance with the wording of 13 January 2018, the activities and documents of e-money institutions must comply with the legislation in force until 13 January 2018.

(4) Persons who provided payment services or issued e-money on the basis of the authorisation provided in § 13 of the wording of this Act valid before 13 January 2018 and intend to continue operating in the corresponding field after this date must bring their activities and documents into compliance with the requirements of the wording of 13 January 2018 by 13 January 2019. Until bringing into compliance with the wording of 13 January 2018, the activities and documents of the above companies must comply with the legislation in force until 13 January 2018. An authorisation granted to a person for provision of payment services or issue of e-money on the basis of § 13 of the wording of this Act valid before 13 January 2018 is deemed to be an authorisation for the application of the exemption provided in subsection 1 of § 11 of subsection 1 of § 12 of the wording of 13 January 2018.

(5) Persons who provided payment initiation services or account information services for the purposes of this Act before 12 January 2016 may continue to provide such services until the entry into force of the European Commission Implementing Regulation specified in Article 98 of Directive 2015/2366/EU of the European Parliament and of the Council in compliance with the regulation valid until the entry into force of the wording of 13 January 2018.

(6) Payment service providers with which clients have a payment account must not restrict the access of a payment initiation service or account information service provider to the payment accounts of clients for the reason that it is not implementing the European Commission Implementing Regulation specified in Article 98 of Directive 2015/2366/EU of the European Parliament and of the Council.

(7) Persons who executed payment transactions specified in clause 11 of subsection 1 of § 4 of the wording of this Act valid before 13 January 2018 before 12 January 2016 must bring their activities and documents into compliance with the wording of 13 January 2018 by 13 July 2018.