Apply for a licence

Payment Institutions

FAQs

The purpose of this page is to make sure that the application process is fully understood.

This section sets out:

  • What is a Payment Institution?
  • What would this Licence allow you to do?
  • Capital Requirements
  • What do you need to submit?

 

Payment Institutions

The term “Payment Institution” refers to a category of payment service provider that facilitates or acts as an intermediary in a cash transaction.

The regulation of payment institutions falls under the scope of the Financial Services (Investment and Fiduciary Services) Act 1989 (“the Act”) and specifically, the Financial Services (EEA)(Payment Services) Regulations 2010 (“the Regulations”).

What would this licence allow you to do?

Payment services may consist of:

  • Enabling cash withdrawals
  • Enabling cash to be placed in a payment account
  • Credit transfers, including standing order
  • Issuing payment instruments or acquiring payment transactions; or
  • Money remittance.

Any firm wishing to provide these type of services must be authorised or registered by the FSC as a payment services institution and is required to comply with certain rules when providing services or completing payment transactions.

There are two types of payment institutions:

  • Authorised payment institutions: Institutions which will be authorised to provide one or more payment services and who will be required to comply with all legislative requirements.
  • Registered payment institutions: Institutions able to carry out certain payment services and to whom the FSC grants a waiver so that are not subject to all the legislative requirements, as long as can demonstrate that meet the following conditions.
    • Turnover does not exceed €3 million of payment transactions per month; and
    • None of the persons responsible for the management of the business have been convicted of financial crime.
    These institutions do not have the right of establishment, or the freedom to provide services (cannot passport), nor can they indirectly exercise those rights when being a member of a payment system, outside of Gibraltar.

A payment institution, whether authorised and registered, can apply for one of the below three classes of licences, depending on the services to be provided:

Class A Class B Class C
  1. Money remittance
  1. Execution of payment transactions where the consent of the payer to execute a payment transaction is given by means of any telecommunication, digital or IT device and the payment is made to the telecommunication, IT system or network operator, acting only as an intermediary between the payment service user and the supplier of the goods and services.

  1. Services enabling cash to be placed on a payment account as well as all the operations required for operating a payment account
  2. Services enabling cash withdrawals from a payment account as well as all the operations required for operating a payment account
  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
    1. Execution of direct debits, including one-off direct debits
    2. Execution of payment transactions through a payment card or a similar device
    3. 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
    1. Execution of direct debits, including one-off direct debits
    2. Execution of payment transactions through a payment card or a similar device
    3. Execution of credit transfers, including standing orders
  5. Issuing and/or acquiring payment services

If an applicant requests a licence for a range of services that falls within two different classes of licence, then the applicant should select the class of licence with the highest capital requirement i.e. a firm wanting to conduct service 6 and 7 is expected to request a Class B licence; a firm wanting to conduct service 6 and 4 is expected to request a Class C licence. This means that a firm is only be able to hold one class of payment services licence.

Agents

A Payment Institution may appoint agents. Agents provide payment services on behalf of the Payment Institution. These must be registered with the GFSC.

Credit Institutions / Electronic Money Institutions

Authorised credit institutions or Electronic Money institutions are not required to hold a separate payment services licence. These institutions will however need to ensure that they are permitted to carry on payment services under their authorisation and that they comply with the relevant payment services requirements.

Capital Requirements

The capital requirements for a payment institution is determined by the type of services being conducted and hence the type of licence obtained.

The initial and ongoing minimum capital requirements are:

  • Class A Licence: €20,000
  • Class B Licence: €50,000
  • Class C Licence: €125,000

Details on the different methods of calculating the own fund required can be found in Regulation 8 of the Financial Services (EEA)(Payment Services) Regulations 2010. An applicant should agree with the FSC which method of calculating its own funds it should apply before the FSC issues a final licence.

Firms holding multiple licences may be required to hold the aggregate of the capital required for each licence prior to being permitted to conduct the proposed activity, and on an ongoing basis. The level of capital required in these cases will be considered by the FSC on a case by case basis. It is advised that this is discussed with the FSC ahead of your application.

What do you need to submit?

An application pack is required to be submitted with all the relevant documents.

An application will not be considered complete if there are any outstanding documents.

The application pack must consist of:

Any other document the applicant considers the FSC should take into consideration as part of the application.

Business Plan

The business plan should clearly and comprehensively set out:

  • How the payment services will be conducted
  • How the firm will comply with the anti-money laundering requirements
  • Target market
  • Type of products
  • Risk management function
  • The firm’s risk appetite
  • Corporate Governance arrangements
  • Compliance arrangements
  • How the firm complies with the mind and management requirements in Gibraltar
  • Agents to be appointed and the controls in place to monitor and supervise these, if applicable
  • Countries/jurisdictions in which it will provide its services including whether these services will be conducted through an agent.
  • How the firm complies with the legislative requirements, in particular with the protection of consumers.

The GFSC will be seeking evidence that the firm has considered the risk, compliance and operational issues associated with the proposed activities, as well as evidence that these have been documented and implemented.

Applicants should ensure that the business plan is coherent with the firm’s risk appetite and capacity.

Application Forms

Should you get an error when opening any of the forms, please check the FAQ tab for guidance on how to override this.

  Application Form
 

Royal Gibraltar Police Vetting Form

Please note that an 'Individual Questionnaire' or a 'Notifiable Document' MUST be accompanied by a Royal Gibraltar Police vetting application form.  

  Individual Questionnaire
  Body Corporate Questionnaire
  Trust Questionnaire

Where a trust is proposed as part of the shareholding structure of an applicant, the GFSC will need sight of a comprehensive explanation setting out the rationale for the use of such a vehicle within the structure.

 

Furthermore, the following is required to be submitted together with the Questionnaire

 

  1. Copy of the trust deed
  2. A written undertaking from the respective trustees to the effect that:
    • the provisions of the trust(s) in respect of beneficiaries, trustee(s) and terms of settlement are as contained in the relevant deed(s) dated [xxx],
    • the resignation of any trustee and, where appropriate, protector will be notified to the Commission forthwith,
    • no other trustee(s) or any additional or different protector(s) will be appointed, without the prior approval in writing of the Commission,
    • any proposed changes to the beneficiaries must be notified in writing to the Commission,
    • any proposed distribution or transfer for value or otherwise of any of the trust assets related to the applicant firm must receive the prior approval in writing of the Commission.
  3. Confirmation from the trustee(s) that they understand that failure to adhere to their undertaking may result in regulatory action against the applicant/regulated firm.

In addition to the Trust Questionnaire and the above listed information, the Applicant is also required to submit Individual Questionnaires for the settlor(s) and any named beneficiaries. This will not apply in cases where the beneficiary is a minor. In these cases, details of the individual will suffice i.e. name, DOB, address, nationality & passport number. When the trust is for example a discretionary family trust where not all beneficiaries are named (i.e. refers to spouse and children/issue of Mr X but does not actually name these individuals) a copy of the ‘letter of wishes’ of the Settlor, if any, will also be required.

In principle, the GFSC does not favour the use of nominee shareholdings for the purposes of holding shares, directly or indirectly, in a regulated firm. The Commission will therefore require that the applicant submit a paper setting out the rationale for the use of these structures in each instance where this is being proposed. This should include comprehensive details as to why it is necessary to hold the shares in this way.

Returns

  Payment Services Supervisory Return

Application Fees

The application fee must accompany your application. Please note, if you are applying for more than one licence, aggregate fees will apply.

Type Nature of Application Application Fee
Class A Payment Institution Application to be Authorised £4,125
Class B Payment Institution Application to be Authorised £6,025
Class C Payment Institution Application to be Authorised £8,250
Class A, B and C Payment Institution Application to be Registered £4,125
Payment Institution Application to extend permitted activities £2,500

Annual Fee

The annual fee is not payable until your application is approved. For details of these please refer to the current Fee Regulations.

Under the GFSC’s annual fee methodology you pay a minimum base fee which is dependent on the set fee block assigned to your regulated sector. In addition to the base fee, you are also required to pay an additional amount that will be calculated based upon a range of factors including activity and income. To calculate the additional part of your annual fee the GFSC will need to review audited financial data and/or supervisory returns. At licensing stage, you will not yet have the requisite audited financial data or supervisory returns available for the GFSC to calculate the additional part of your annual fee. On this basis, the GFSC will only require you to pay the base fee at this stage and, towards the end of the GFSC’s financial year end (31 March), you will then be invoiced for the remainder of the annual fee which will be calculated based upon the financial data and/or supervisory returns provided by you up until that date.

Details on the payment methods can be requested from the Accounts team.

Service Level Standards

The current service level standards are:

  • To provide initial feedback to an application within 5 weeks of a complete application being received.
  • Once all of the information has been received from an applicant and the application is therefore considered to be complete, we aim to provide an in principle decision within 4 weeks.

Please be advised that the above service level standards refer to the period of time in which the GFSC holds applications for consideration. Where we require further information or documents from an applicant the service level standards will be suspended until we receive the requested information. The period of time an application is pending because of factors outside the control of the GFSC will not be accounted for under the service level standards.

Please note that should we be unlikely to meet our SLS’s, we will advise you as soon as possible.

The purpose of this page is to set out:

  • What is an extension?
  • What do you need to submit?
  • Guidance

What is an extension?

Firms or individuals that are already licensed by the FSC may apply to extend their authorisation/licence to provide additional financial or professional services.

If you are seeking a licence, authorisation or registration under a separate Act, please contact the Authorisation team so that we can determine what documents you are required to submit.

What do you need to submit?

An application pack is required to be submitted with all the relevant documents.

An application will not be considered complete if there are any outstanding documents.

The application pack must consist of:

  • Application Fee (if applicable)
  • Revised Business Plan
  • Financial projections for the the next 3 years, clearly identifying the impact of the additional business
    • Profit and loss account
    • Balance sheet
    • Returns (these need to be on a quarterly basis for the first year and then annually for the following 2 years)
  • Individual Questionnaires (for any new individual holding a notifiable position)
  • Body Corporate Questionnaires (for any new entity within the structure)
  • Trust Questionnaire (if applicable)

Any other document the applicant considers the FSC should take into consideration as part of the application.

Guidance

The licensee should consider and provide information on the following:

  • What new licence/authorisation it requires
  • The type of new business/activity
  • Where the business will be sourced
  • Resources to deal with the additional business
  • The impact of the additional business on its capital requirements
  • What changes are being effected to its systems and controls.