This blog and others are joint efforts between Fintech Ireland and CompliReg.

First Published Tuesday 9th April 2024

Before we dive into the detail contained in the new (issued 9 April 2024) "Central Bank Expectations for Authorisation as a Payment Institution or Electronic Money Institution, or Registration as an Account Information Service Provider", a couple of things to note:
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1. the format, look and feel of the new webpage on the CBI's website;
2. the links from How We Regulate leading to the Authorisation Page, regardless if you clicked on Payments Institutions, Electronic Money Institutions, Small Electronic Money Institutions or Account Information Service Providers redirect you to the same page. That page ends in payment-authorisation.  Seems that from a pragmatic and practical stance, the CBI is getting ready for the merging of the e-money and payment services regimes under the current PSD3 legislative proposal;
3. [12+ months for authorisation] although buried away at the bottom of the CBI's webpage, there is this very welcome statement about how long it may take to get authorised. "Experience suggests that it can take over 12 months for firms to provide all of the information necessary to enable a decision to be made" ;
4. [requirement for a pre-application meeting] each proposed Applicant must meet with the CBI before an Application is filed;
5. [no triple hatting] the Central Bank informs that it has not approved applications which propose triple hatting.  It also states that "Proposals to triple hat roles present significant doubt as to the commitment of an applicant firm to have adequate governance in place."
6. [dual hatting].  Dual hatting is permissible on a case-by-case basis, depending on the nature, scale and complexity of the proposal, and insofar as there is no potential or perceived blurring of the three lines of defence. Any proposal for dual hatting of PCF roles should be accompanied by a detailed rationale setting out how the role holder would have sufficient capacity, and the appropriate qualifications/experience, to effectively perform the proposed roles.
7. [appointment of CEO, chair & others] the Central Bank states that "the appropriateness of resources will be determined at each stage on a case-by-case basis, applicant firms which have made senior appointments (for example Chair and Chief Executive Officer) at the application point tend to progress through the authorisation process in a more timely manner.". The Central bank also states that "Applicant firms which have made the necessary senior appointments early in the process generally submit a more complete application and, therefore, tend to progress through the assessment process in a timelier manner."
8. currently, there is no fee for submitting an Application (but there is of a course the separate Industry Funding Levy);
9. Dormancy Policy - the CBI's dormancy policy applies when an applicant has not provided an adequate response within 60 working days following the issuance of comments. A “Minded to Deem Withdrawn” letter is sent to the applicant after 50 working days of comments issued, notifying the applicant that it has 10 working days to provide all outstanding documentation or the application will be considered withdrawn. If the applicant does not respond within the 10 working days, a “Deemed Withdrawn” letter is sent and the application is not considered further by the CBI.    

Now that we have covered the burning issues on most applicants' mind, let's turn to what the CBI has set out in its new/updated "Expectations for Authorisation as a Payment Institution or Electronic Money Institution, or Registration as an Account Information Service Provider"

Referred to below is the Pre-Application Key Facts Document (“KFD”). Issued 9 April 2024. The purpose of the KFD is to provide sufficient detail to the CBI on an applicant's proposal for authorisation/registration.  It would normally consist of c.15-20 pages. It should be included in first batch of documents an Applicant reads.

As you will note from the above diagram, the authorisation assessment process consists of the following three stages:

1. Exploratory Stage. This consists of two phases:

• Initial meeting with the applicant firm; and
• Submission of required information (Key Information Check) and initial assessment;

2. Assessment Stage; and

3. Authorisation/Registration Decision Stage.

Phase 2 – Key Information Check and Initial Assessment

In addition to ensuring that all required documentation has been provided, this phase encompasses an initial assessment of the submission.

At the end of this phase, the Central Bank will notify the firm of the outcome which is either:

• Progression

The Central Bank considers that the application can progress to the Assessment Stage.  A specific case manager is assigned who will lead the assessment, and will be the primary point of contact for the applicant firm during the assessment process.

• Issues have been Identified Precluding Progression

The Central Bank considers that the application cannot progress to the Assessment Stage.  The applicant will be advised as to the rationale for not progressing and will be provided with an opportunity to address the issues identified (through written submissions and/or meetings).

During this stage the Central Bank conducts its assessment of the application. The Central Bank may request additional information, and detailed assessment meetings in relation to one or more areas of the application will be undertaken with the applicant. High quality applications with comprehensive and complete information and explanations reduce the need for additional information requests. Individuals proposed for certain key roles (Pre-Approval Controlled Function roles) may be invited for interview as part of the assessment of their Fitness and Probity for the role for which they are applying.

At the end of the assessment process, the Central Bank will notify the firm of the outcome of its assessment. There are two possible outcomes:
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• Positive Outcome (“Minded To Authorise/Register” letter)

Where the applicant firm has positively demonstrated that it will meet all authorisation/ registration requirements and expectations, the Central Bank will issue a “Minded to Authorise/Register” letter which will include, inter alia, requirements to be addressed prior to authorisation/registration, conditions to be addressed post-authorisation, and the proposed level of capital to be held (neither conditions nor capital are applicable to Account Information Service Providers).

or

• Negative Outcome (“Minded to Refuse” letter)

In the event that the Central Bank is not satisfied following the conclusion of its assessment phase that it can authorise/register the firm, a “Minded to Refuse” letter will be issued. This will include the reason(s) for the Central Bank’s proposed decision. The letter will specify the period within which the applicant firm may make submissions in writing in relation to the proposed refusal. Any submissions made will be considered by the Central Bank before making a decision on the matter.

This is the stage in which the final decision as to authorisation/registration is made. There are two possible outcomes:

• Positive Outcome (Letter Granting Authorisation/Registration)

Subject to the pre-authorisation/registration requirements in the “Minded to Authorise” letter having been addressed, no new adverse information coming to the Central Bank’s attention in the interim, and agreement from the applicant firm as to the proposed conditions and capital (not applicable to Account Information Service Providers), a letter granting authorisation/registration will be issued, and the applicant firm will then be able to commence its regulated activities.

or
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• Negative Outcome (Letter of Refusal)

Where a “Minded to Refuse” letter has issued, the Central Bank will review any submissions made by the applicant firm. If the Central Bank is still not satisfied to approve an application following the review of any submissions to a ‘Minded to Refuse’ letter, it will issue a letter of refusal.

​The 90 day Service Standard clock for the Assessment Stage will be paused where an information request has been issued to the applicant until such time as a satisfactory response has been provided. In addition, the clock can be switched off entirely where any of the following arise:
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• Another regulatory authority has to be contacted;
• Persons are subject to interview;
• Significant legal issues arise;
• Significant fitness and probity issues arise;
• The business model is complex or novel in nature;
• Significant changes to the business model, the applicant’s shareholder structure or other key aspects of an application arise during the review process, or where the application becomes dormant; or
• The CBI is minded to refuse an application.  

The CBI has Dormancy Policy.

This means that when an applicant has not provided an adequate response within 60 working days following the issuance of comments. A “Minded to Deem Withdrawn” letter is sent to the applicant after 50 working days of comments issued, notifying the applicant that it has 10 working days to provide all outstanding documentation or the application will be considered withdrawn. If the applicant does not respond within the 10 working days, a “Deemed Withdrawn” letter is sent and the application is not considered further by the Central Bank.

A) You need to read the following before you put pen to paper on the actual application documents:

Thereafter read through the relevant Application Form from the list below:

B) Then you will need to get to grips with:

• the Irish Anti-Money Laundering, Counter-Terrorist Financing and Financial Sanction regime
• the Qualifying Shareholders of Payment Institutions and Electronic Money Institutions requirements
• Pre-Approval Controlled Function Roles regime

The following forms should be completed:

1) Legal Persons/Entities

• Application for a Legal Person
  

2) Natural Persons

• Application for a Natural Person 

3) Executive Directors of Legal Persons/Entities

• Application for a Director of a Legal Person or Entity with a Qualifying Holding

​While the above forms are not required to be completed for Account Information Service Providers, the Central Bank will assess the suitability of all legal and natural persons with a qualifying holding.

For all Pre-Approval Controlled Function roles (typically board members, senior management, key function holders), the following should be completed:

• Fitness and Probity Individual Questionnaires

These should be submitted electronically via the Central Bank of Ireland Portal. Please note access to the Portal is only provided once an application has progressed to Stage 2 - Assessment Phase.

In addition to the foregoing documents accessible above, it would make sense for Applicants to read and become familiar with:

Service Standards

• ​Service Standards issued by the CBI

Is there a fee?
There is currently no fee for submitting an application. Once authorised, a firm is subject to an annual Industry Funding levy. For further information on the levy see here.

How do I submit the application?
Applications must be submitted via Kiteworks. Please contact [email protected] to obtain access.

How long is the process expected to take?
The time taken to receive an authorisation decision is primarily dependent on the preparedness of an applicant firm to undertake the assessment process, and on the quality and timeliness of submissions. The Central Bank will, in accordance with relevant legislation complete its assessment within 3 months of the receipt of the application, or if the information is incomplete, within three months of receiving all of the information required for the Central Bank to make a decision on the application. Experience suggests that it can take over 12 months for firms to provide all of the information necessary to enable a decision to be made. See above for further information on Service Standards.

Is a Pre-Application meeting required before an Application can be submitted?
Yes, see above for details of the Initial Meeting which forms part of the Exploratory Stage.

What to do if I need more help?
For any authorisation related queries, you contact the Payments Authorisation Team ([email protected]). If you have a query in relation to new technologies, email [email protected].

If you need help and support too file your Application, talk to Peter Oakes at CompliReg via [email protected].

Posted by Peter Oakes, Fintech Ireland  - ​https://www.linkedin.com/in/peteroakes

** Authorisation by Central Bank of Ireland of an Electronic Money Institution and a Payments Institution **

Our last post on additions to the Irish regulated fintech family of payment services firms and electronic money firms was back on 5 November 2020 when we released Version 3.0 of the 'Emoney & Payment Services Firms Authorised in Ireland Map' as at 2 November 2020.

Again thanks to CompliReg we have released an update to that Map, which now stands at Version 3.0.  The new joiners are OFX Payments Ireland Limited and BlueSnap Payment Services Ireland Limited. 

OFX Payments was authorised on 16 December 2020, and in addition to its authorisation to issue emoney it also secured payments services 3c, 4c, 5, and 6.  BlueSnap Payments received its payments institution authorisation on 23 December 2020 and is authorised to provide payment service 5. See below for a description of these payment services numbers*.

Both firms arrive in Ireland ahead of the end of the Brexit transition date from the UK where their UK affiliates are authorised by the UK Financial Conduct Authority. OFX's global headquarters is in Sydney, Australia and BlueSnap was founded in Israel.

Welcome to Ireland OFX and Bluesnap.  We know that there are others soon to join the regulated fintech ecosystem in Ireland which are making their way through the Central Bank of Ireland authorisation pipeline!  

Those firms in the above Map which are indigenous to Ireland also appear on our bigger Fintech Ireland Map version 3.0 which you can find here. If you think you should be on the Fintech Ireland Map, complete our Survey.  Do it soon as version 4 of that Map is slated for release very shortly!

If you are looking to get authorised in Ireland as an emoney or payments firm, see these Authorisation Guides and feel free to contact us for a informative dialogue on the authorisation process.  We are chatting with about 4-5 firms a week.  The completion of the Brexit transition period has not cooled interest in Ireland as a home for regulated fintech!

* Payment Services:
3. Execution of payment transactions, including transfers of funds on a payment account with the user’s payment service provider or with another payment service provider ... (c). Execution of credit transfers, including standing orders
4. Execution of payment transactions where the funds are covered by a credit line for a payment service user ... (c). Execution of credit transfers, including standing orders
5. Issuing of payment instruments and/or acquiring of payment transactions
​6. Money remittance

** Another regulated payments institution for Ireland **

It has been an interesting number of months since Fintech Ireland published the last 'Emoney & Payment Services Firms Authorised in Ireland' Map back on 1 July 2020 (thanks to CompliReg). At that date we only had 3 emoney/payments firms authorised in Ireland in 2020.

On 11 September 2020, Ireland welcomed another #brexit hedge firm, this one being Segpay Ireland, authorised as payments institution for 3(c). Execution of credit transfers, including standing orders and (5) Issuing of payment instruments and/or acquiring of payment transactions.

“We’ve spent countless hours preparing for Brexit because it was so important to have our merchants remain on solid ground when Brexit officially goes into motion,” said Cathy Beardsley, Segpay President & CEO. Ailish Penston is Country Manager. 

Welcome to Ireland SegPay and also the many others in the Central Bank of Ireland authorisation pipeline!

Read more about SegPay here.

Those firms in the above map which are indigenous to Ireland also appear on our bigger Fintech Ireland Map version 3.0 which you can find here. If you think you should be on the Fintech Ireland Map, complete our Survey.

If you are looking to get authorised in Ireland as an emoney or payments firm, see these Authorisation Guides.