Captured statutory text (L5)
5 Electronic Money Regulations 2011
(1)The Electronic Money Regulations 2011 are amended as follows.
(2)In regulation 2(1) (interpretation)—
(a)in the appropriate places insert—
“account information service” means an online service to provide consolidated information on one or more payment accounts held by the payment service user with another payment service provider or with more than one payment service provider, and includes such a service whether information is provided—
(a)in its original form or after processing;
(b)only to the payment service user or to the payment service user and to another person in accordance with the payment service user's instructions;
;“European Banking Authority” means the European Banking Authority established by Regulation (EU) 1093/2010 of the European Parliament and of the Council of 24th November 2010 establishing a European Supervisory Authority (European Banking Authority) ;
;“payment initiation service” means a service to initiate a payment order at the request of the payment service user with respect to a payment account held at another payment service provider;
;“payment service provider” has the meaning given in regulation 2(1) of the Payment Services Regulations 2017;
;and“sensitive payment data” means information, including personalised security credentials, which could be used to carry out fraud; but in relation to account information services and payment initiation services does not include the name of an account holder or an account number;
; and
(b)for the definition of “own funds” substitute—
“own funds” means own funds as defined in Article 4(1)(118) of the capital requirements regulation, and “Common Equity Tier 1 capital”, “Tier 1 capital” and “Tier 2 capital” have the same meanings as in that regulation;
;
(c)in the definition of “payment services” for “2009” substitute “ 2017 ”;
(d)for the definition of “the payment services directive” substitute—
“the payment services directive” means Directive 2015/2366/EU of the European Parliament and of the Council of 25th November 2015 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;
.
(3)In regulation 3 (exclusions), for paragraphs (a) and (b) substitute—
(a)monetary value stored on specific payment instruments that can be used only in a limited way and meet one of the following conditions—
(i)allow the holder to acquire goods or services only in the issuer's premises;
(ii)are issued by a professional issuer and allow the holder to acquire goods or services only within a limited network of service providers which have direct commercial agreements with the issuer;
(iii)may be used only to acquire a very limited range of goods or services; or
(iv)are valid only in a single EEA State, are provided at the request of an undertaking or a public sector entity, and are regulated by a national or regional public authority for specific social or tax purposes to acquire specific goods or services from suppliers which have a commercial agreement with the issuer;
(b)monetary value that is used to make payment transactions resulting from services provided by a provider of electronic communications networks or services, including transactions between persons other than that provider and a subscriber, where those services are provided in addition to electronic communications services for a subscriber to the network or service, and where the additional service is—
(i)for purchase of digital content and voice-based services, regardless of the device used for the purchase or consumption of the digital content, and charged to the related bill; or
(ii)performed from or via an electronic device and charged to the related bill for the purchase of tickets or for donations to organisations which are registered or recognised as charities by public authorities, whether in the United Kingdom or elsewhere,
provided that the value of any single payment transaction does not exceed £40, and the cumulative value of payment transactions for an individual subscriber in a month does not exceed £240.
.
(4)After regulation 3 (electronic money: exclusions) insert—
Notification of use of limited network exclusion(3A)
(1)If, in any period of 12 months, the total value of payment transactions made with monetary value falling within regulation 3(a)(i) to (iii) issued by a person (“issuer”) exceeds 1 million euros, the issuer must notify the Authority.
(2)The period of 12 months referred to in paragraph (1) does not include any period in respect of which a notification has already been made under paragraph (1).
(3)A notification under paragraph (1) must—
(a)include a description of the transactions made; and
(b)specify the exclusion by virtue of which the monetary value is not electronic money.
(4)Notifications and information provided to the Authority under this regulation must be given—
(a)within such time as the Authority may direct after the end of the period of 12 months referred to in paragraph (1); and
(b)in such form or verified in such manner as the Authority may direct,
and different directions may be given in relation to different notifications or information or categories of notification or information.
(5)When the Authority receives a notification under this regulation, the Authority must assess whether the notified monetary value falls within regulation 3(a)(i) to (iii).
(6)If the Authority considers that any part of the notified monetary value does not fall within regulation 3(a)(i) to (iii)—
(a)the Authority must notify the issuer, and
(b)the issuer may refer the matter to the Upper Tribunal.
Notification of use of electronic communications exclusion(3B)
(1)If a person (“issuer”) issues, or intends to issue, monetary value falling within regulation 3(b), the service provider must—
(a)notify the Authority, and
(b)include with such notification a description of the transactions for which the monetary value is intended to be used.
(2)The issuer must provide a notification under paragraph (1)—
(a)if the issuer started to issue the monetary value before 13th January 2018, on or before that date, or
(b)otherwise, before the issuer starts to issue the monetary value.
(3)The issuer must also provide to the Authority, at such times as the Authority may direct, an annual audit opinion testifying that the transactions for which the monetary value is used comply with the limits mentioned in regulation 3(b).
(4)Information provided to the Authority under this regulation must be in such form or verified in such manner as the Authority may direct.
(5)Different directions may be given under paragraph (3) and (4) in relation to different issuers or different categories of issuers.
.
(5)In regulation 4 (the register of certain electronic money issuers)—
(a)in paragraph (1) after sub-paragraph (b) insert—
(ba)persons who have notified the Authority in accordance with regulation 3A or 3B;
;
(b)in paragraph (6) after sub-paragraph (a) insert—
(aa)enter in the register any cancellation of an authorisation or registration;
(ab)enter in the register a description of the service provided by a person included on the register by virtue of paragraph (1)(ba);
;
(c)after paragraph (6) insert—
(7)The Authority must, without delay, notify the European Banking Authority of—
(a)the information entered in the register;
(b)any changes to the information in the register;
(c)the reasons for the cancellation of any authorisation or registration; and
(d)where a person is included on the register by virtue of paragraph (1)(ba), the particular exclusion which applies to the person.
.
(6)In regulation 6 (conditions for authorisation)—
(a)in paragraph (2) for “regulation 5” substitute “ regulations 5 and 20 ”;
(b)after paragraph (4) insert—
(4A)The applicant carries on, or will carry on, at least part of its electronic money and payment service business in the United Kingdom.
;
(c)in paragraph (6), after sub-paragraph (d) insert—
(e)in the case of an applicant which proposes to carry on payment initiation services, it holds professional indemnity insurance or a comparable guarantee, which covers—
(i)the territories in which the applicant proposes to offer payment initiation services; and
(ii)the applicant's potential liability under regulations 76 and 91 to 95 of the Payment Services Regulations 2017, up to such amount as the Authority may direct; and
(f)in the case of an applicant which proposes to carry on account information services, it holds professional indemnity insurance or a comparable guarantee, which covers—
(i)the territories in which the applicant proposes to offer account information services; and
(ii)the applicant's potential liability to account servicing payment service providers and payment service users resulting from unauthorised or fraudulent access to, or use of, payment account information, up to such amount as the Authority may direct.
.
(7)In regulation 8 (variation at request of an authorised electronic money institution), in the wording after paragraph (c)—
(a)after “provided that” insert “ the Authority is satisfied that ”;
(b)for “will continue to be met” substitute “ are being or are likely to be met ”.
(8)In regulation 10(1) (cancellation of authorisation)—
(a)in sub-paragraph (e) after “own funds” insert “ , or does not inform the Authority of a major change in circumstances which is relevant to its meeting those conditions or that requirement, as required by regulation 37 ”;
(b)in sub-paragraph (g) after “stability of” insert “ , or trust in, ”;
(c)in paragraph (i) after “unlawful” insert “ , including where such provision of services is unlawful because the person's registration in a register maintained under regulation 54 or 55 of the Money Laundering, Terrorist Financing and Transfer of Funds (Information on the Payer) Regulations 2017 has been cancelled under regulation 60 of those Regulations ”.
(9)In regulation 11(1) (variation of authorisation on Authority's own initiative)—
(a)in sub-paragraph (a) after “own funds” insert “ , or does not inform the Authority of a major change in circumstances which is relevant to its meeting those conditions or that requirement, as required by regulation 37 ”;
(b)in sub-paragraph (c) after “stability of” insert “ , or trust in, ”;
(c)in sub-paragraph (e) after “unlawful” insert “ , including where such provision of services is unlawful because the person's registration in a register maintained under regulation 54 or 55 of the Money Laundering, Terrorist Financing and Transfer of Funds (Information on the Payer) Regulations 2017 has been cancelled under regulation 60 of those Regulations ”.
(10)In regulation 13 (conditions for registration)—
(a)in paragraph (2) for “regulation 12” substitute “ regulations 12 and 20 ”;
(b)after paragraph (4) insert—
(4A)The business to which the application relates must not include the provision of account information services or payment initiation services.
;
(c)in paragraph (8)(e) for “2009” substitute “ 2017 ”.
(11)In regulation 15 (supplementary provisions)—
(a)in paragraph (b), in the modified version of regulation 8—
(i)in paragraph (1), in the wording after sub-paragraph (c)—
(aa)after “provided that” insert “ the Authority is satisfied that ”;
(bb)for “continue to be met” substitute “ are being or are likely to be met ”;
(ii)in paragraph (2) omit “that must continue to be met”;
(b)in paragraph (c), in the modified version of regulation 10(1)(e), after “(d)” insert “ , or does not inform the Authority of a major change in circumstances which is relevant to its meeting those conditions, as required by regulation 37 ”.
(12)In regulation 16 (application to become an authorised electronic money institution where a financial limit is exceeded)—
(a)for the heading substitute “ application for authorisation if requirements cease to be met ”;
(b)for “referred to in regulation 8(2)(c) or (d) (as applied by regulation 15)”, substitute “ in regulation 13(3), (4), (8) or (9) ”.
(13)In regulation 20 (safeguarding requirements)—
(a)after paragraph (2) insert—
(2A)An electronic money institution may safeguard certain relevant funds in accordance with regulation 21 and the remaining relevant funds in accordance with regulation 22.
;
(b)in paragraph (6) for “Regulation 19 of the Payment Services Regulations 2009” substitute “ Regulation 23 of the Payment Services Regulations 2017 ”.
(14)In regulation 21 (safeguarding option 1)—
(a)in paragraph (2)(a) after “authorised credit institution” insert “ or the Bank of England ”;
(b)after paragraph (4) insert—
(4A)Notwithstanding paragraphs (1), (2), (3)(b) and (4), where an electronic money institution is a participant in a designated system and the institution holds an account at the Bank of England for the purposes of completing the settlement of transfer orders that have been entered into the designated system on behalf of electronic money holders—
(a)funds held in the account pending settlement in accordance with the rules or default arrangements of the designated system, in respect of transfer orders that have been entered into the designated system on behalf of electronic money holders, may continue to be held in the account with relevant funds;
(b)the account, or a specified amount of funds in the account, may be subject to an interest or right in favour of the Bank of England in order to ensure the availability of funds to complete the settlement of transfer orders in accordance with the rules or default arrangements of the designated system;
(c)subject to paragraph (4B), funds received into the account by the electronic money institution upon settlement are to be considered as having been appropriately safeguarded in accordance with this regulation from the time of receipt in the designated system until the time of receipt into the account.
(4B)The Authority may direct that paragraph (4A)(c) does not apply in relation to a designated system if, in the Authority's view, the rules and default arrangements of that system do not adequately insulate the funds of electronic money holders from the claims of other creditors of electronic money institutions which are participants in the system.
;
(c)in paragraph (5)—
(i)omit “and” after sub-paragraph (b);
(ii)after sub-paragraph (c) insert—
(d)any funds held in an account as permitted by paragraph (4A)(a);
(e)any funds expected to be received into an account as described in paragraph (4A)(c) in respect of transfer orders that have been entered into the designated system; and
(f)any funds received into an account as described in paragraph (4A)(c).
;
(d)in paragraph (7) after the definition of “authorised custodian” insert—
“default arrangements”, “designated system”, “rules”, “settlement”, “system” and “transfer order” have the same meanings as in the Financial Markets and Insolvency (Settlement Finality) Regulations 1999 .
.
(15)In regulation 22 (safeguarding option 2), in paragraph (1)(a)(ii) and (iii) after “a” insert “ comparable ”.
(16)In regulation 24 (insolvency events)—
(a)in paragraph (1)(b) after “21(2)(a) or (b)” insert “ or (4A), ”;
(b)in paragraph (4), in the definition of “asset pool”, after paragraph (b) insert—
(ba)where regulation 21(4A) applies, any funds that are received into the account held at the Bank of England upon settlement in respect of transfer orders that have been entered into the designated system on behalf of electronic money holders, whether settlement occurs before or after the insolvency event;
;
(c)after paragraph (4) insert—
(5)In paragraph (4) “designated system”, “settlement” and “transfer order” have the same meanings as in the Financial Markets and Insolvency (Settlement Finality) Regulations 1999.
.
(17)In regulation 26 (outsourcing)—
(a)in paragraph (2)—
(i)after “important operational function” insert “ , including provision of an information technology system ”;
(ii)in sub-paragraph (a)(ii) after “monitor” insert “ and retrace ”;
(b)in paragraphs 2(a)(ii), (b) and (c) and (3)(a) for “2009” substitute “ 2017 ”;
(c)after paragraph (3) insert—
(4)An authorised electronic money institution must notify the Authority without undue delay of any change in outsourced functions or the persons to which functions are outsourced.
.
(18)In regulation 28 (notice of intention)—
(a)in paragraph (2), for sub-paragraphs (a) to (d) substitute—
(a)states the name and address of the institution, and any authorisation or reference number;
(b)identifies the EEA States in which it intends to operate;
(c)identifies the electronic money issuance, redemption, distribution or payment services which it seeks to carry on in those States;
(d)if the institution intends to use an agent to provide the services in any of those States, includes the information referred to in regulation 34(3) (requirement for agents to be registered);
(e)if the institution intends to use an EEA branch to provide the services in any of those States, includes—
(i)the information referred to in paragraphs 2 and 5 of Schedule 1 in relation to the services to be provided through each EEA branch;
(ii)the names of those responsible for the management of each proposed EEA branch; and
(iii)details of the organisational structure of each proposed EEA branch;
(f)if the authorised payment institution intends to enter into a contract with a person in another EEA State under which that person will carry out any operational function relating to the issuance, distribution or issuance of electronic money or the provision of payment services in that EEA State, includes notification of that intention; and
(g)identifies the distributors, if any, whom the institution intends to engage to distribute or redeem electronic money in exercise of its passport rights in that State.
;
(b)for paragraphs (3) and (4) substitute—
(3)If any of the information provided by an authorised electronic money institution in a notice of intention changes, including by the addition of a further branch, the institution must give the Authority notice of such changes in a further notice of intention.
(4)The Authority must, within one month beginning with the date on which it receives a complete notice of intention, inform the host state competent authority of the information contained in the notice of intention.
.
Full captured verbatim text
(1) The Electronic Money Regulations 2011 are amended as follows. (2) In regulation 2(1) (interpretation)— (a) in the appropriate places insert— “account information service” means an online service to provide consolidated information on one or more payment accounts held by the payment service user with another payment service provider or with more than one payment service provider, and includes such a service whether information is provided— (a) in its original form or after processing; (b) only to the payment service user or to the payment service user and to another person in accordance with the payment service user's instructions; ;“European Banking Authority” means the European Banking Authority established by Regulation (EU) 1093/2010 of the European Parliament and of the Council of 24th November 2010 establishing a European Supervisory Authority (European Banking Authority) ; ;“payment initiation service” means a service to initiate a payment order at the request of the payment service user with respect to a payment account held at another payment service provider; ;“payment service provider” has the meaning given in regulation 2(1) of the Payment Services Regulations 2017; ;and“sensitive payment data” means information, including personalised security credentials, which could be used to carry out fraud; but in relation to account information services and payment initiation services does not include the name of an account holder or an account number; ; and (b) for the definition of “own funds” substitute— “own funds” means own funds as defined in Article 4(1)(118) of the capital requirements regulation, and “Common Equity Tier 1 capital”, “Tier 1 capital” and “Tier 2 capital” have the same meanings as in that regulation; ; (c) in the definition of “payment services” for “2009” substitute “ 2017 ”; (d) for the definition of “the payment services directive” substitute— “the payment services directive” means Directive 2015/2366/EU of the European Parliament and of the Council of 25th November 2015 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; . (3) In regulation 3 (exclusions), for paragraphs (a) and (b) substitute— (a) monetary value stored on specific payment instruments that can be used only in a limited way and meet one of the following conditions— (i) allow the holder to acquire goods or services only in the issuer's premises; (ii) are issued by a professional issuer and allow the holder to acquire goods or services only within a limited network of service providers which have direct commercial agreements with the issuer; (iii) may be used only to acquire a very limited range of goods or services; or (iv) are valid only in a single EEA State, are provided at the request of an undertaking or a public sector entity, and are regulated by a national or regional public authority for specific social or tax purposes to acquire specific goods or services from suppliers which have a commercial agreement with the issuer; (b) monetary value that is used to make payment transactions resulting from services provided by a provider of electronic communications networks or services, including transactions between persons other than that provider and a subscriber, where those services are provided in addition to electronic communications services for a subscriber to the network or service, and where the additional service is— (i) for purchase of digital content and voice-based services, regardless of the device used for the purchase or consumption of the digital content, and charged to the related bill; or (ii) performed from or via an electronic device and charged to the related bill for the purchase of tickets or for donations to organisations which are registered or recognised as charities by public authorities, whether in the United Kingdom or elsewhere, provided that the value of any single payment transaction does not exceed £40, and the cumulative value of payment transactions for an individual subscriber in a month does not exceed £240. . (4) After regulation 3 (electronic money: exclusions) insert— Notification of use of limited network exclusion(3A) (1) If, in any period of 12 months, the total value of payment transactions made with monetary value falling within regulation 3(a)(i) to (iii) issued by a person (“issuer”) exceeds 1 million euros, the issuer must notify the Authority. (2) The period of 12 months referred to in paragraph (1) does not include any period in respect of which a notification has already been made under paragraph (1). (3) A notification under paragraph (1) must— (a) include a description of the transactions made; and (b) specify the exclusion by virtue of which the monetary value is not electronic money. (4) Notifications and information provided to the Authority under this regulation must be given— (a) within such time as the Authority may direct after the end of the period of 12 months referred to in paragraph (1); and (b) in such form or verified in such manner as the Authority may direct, and different directions may be given in relation to different notifications or information or categories of notification or information. (5) When the Authority receives a notification under this regulation, the Authority must assess whether the notified monetary value falls within regulation 3(a)(i) to (iii). (6) If the Authority considers that any part of the notified monetary value does not fall within regulation 3(a)(i) to (iii)— (a) the Authority must notify the issuer, and (b) the issuer may refer the matter to the Upper Tribunal. Notification of use of electronic communications exclusion(3B) (1) If a person (“issuer”) issues, or intends to issue, monetary value falling within regulation 3(b), the service provider must— (a) notify the Authority, and (b) include with such notification a description of the transactions for which the monetary value is intended to be used. (2) The issuer must provide a notification under paragraph (1)— (a) if the issuer started to issue the monetary value before 13th January 2018, on or before that date, or (b) otherwise, before the issuer starts to issue the monetary value. (3) The issuer must also provide to the Authority, at such times as the Authority may direct, an annual audit opinion testifying that the transactions for which the monetary value is used comply with the limits mentioned in regulation 3(b). (4) Information provided to the Authority under this regulation must be in such form or verified in such manner as the Authority may direct. (5) Different directions may be given under paragraph (3) and (4) in relation to different issuers or different categories of issuers. . (5) In regulation 4 (the register of certain electronic money issuers)— (a) in paragraph (1) after sub-paragraph (b) insert— (ba) persons who have notified the Authority in accordance with regulation 3A or 3B; ; (b) in paragraph (6) after sub-paragraph (a) insert— (aa) enter in the register any cancellation of an authorisation or registration; (ab) enter in the register a description of the service provided by a person included on the register by virtue of paragraph (1)(ba); ; (c) after paragraph (6) insert— (7) The Authority must, without delay, notify the European Banking Authority of— (a) the information entered in the register; (b) any changes to the information in the register; (c) the reasons for the cancellation of any authorisation or registration; and (d) where a person is included on the register by virtue of paragraph (1)(ba), the particular exclusion which applies to the person. . (6) In regulation 6 (conditions for authorisation)— (a) in paragraph (2) for “regulation 5” substitute “ regulations 5 and 20 ”; (b) after paragraph (4) insert— (4A) The applicant carries on, or will carry on, at least part of its electronic money and payment service business in the United Kingdom. ; (c) in paragraph (6), after sub-paragraph (d) insert— (e) in the case of an applicant which proposes to carry on payment initiation services, it holds professional indemnity insurance or a comparable guarantee, which covers— (i) the territories in which the applicant proposes to offer payment initiation services; and (ii) the applicant's potential liability under regulations 76 and 91 to 95 of the Payment Services Regulations 2017, up to such amount as the Authority may direct; and (f) in the case of an applicant which proposes to carry on account information services, it holds professional indemnity insurance or a comparable guarantee, which covers— (i) the territories in which the applicant proposes to offer account information services; and (ii) the applicant's potential liability to account servicing payment service providers and payment service users resulting from unauthorised or fraudulent access to, or use of, payment account information, up to such amount as the Authority may direct. . (7) In regulation 8 (variation at request of an authorised electronic money institution), in the wording after paragraph (c)— (a) after “provided that” insert “ the Authority is satisfied that ”; (b) for “will continue to be met” substitute “ are being or are likely to be met ”. (8) In regulation 10(1) (cancellation of authorisation)— (a) in sub-paragraph (e) after “own funds” insert “ , or does not inform the Authority of a major change in circumstances which is relevant to its meeting those conditions or that requirement, as required by regulation 37 ”; (b) in sub-paragraph (g) after “stability of” insert “ , or trust in, ”; (c) in paragraph (i) after “unlawful” insert “ , including where such provision of services is unlawful because the person's registration in a register maintained under regulation 54 or 55 of the Money Laundering, Terrorist Financing and Transfer of Funds (Information on the Payer) Regulations 2017 has been cancelled under regulation 60 of those Regulations ”. (9) In regulation 11(1) (variation of authorisation on Authority's own initiative)— (a) in sub-paragraph (a) after “own funds” insert “ , or does not inform the Authority of a major change in circumstances which is relevant to its meeting those conditions or that requirement, as required by regulation 37 ”; (b) in sub-paragraph (c) after “stability of” insert “ , or trust in, ”; (c) in sub-paragraph (e) after “unlawful” insert “ , including where such provision of services is unlawful because the person's registration in a register maintained under regulation 54 or 55 of the Money Laundering, Terrorist Financing and Transfer of Funds (Information on the Payer) Regulations 2017 has been cancelled under regulation 60 of those Regulations ”. (10) In regulation 13 (conditions for registration)— (a) in paragraph (2) for “regulation 12” substitute “ regulations 12 and 20 ”; (b) after paragraph (4) insert— (4A) The business to which the application relates must not include the provision of account information services or payment initiation services. ; (c) in paragraph (8)(e) for “2009” substitute “ 2017 ”. (11) In regulation 15 (supplementary provisions)— (a) in paragraph (b), in the modified version of regulation 8— (i) in paragraph (1), in the wording after sub-paragraph (c)— (aa) after “provided that” insert “ the Authority is satisfied that ”; (bb) for “continue to be met” substitute “ are being or are likely to be met ”; (ii) in paragraph (2) omit “that must continue to be met”; (b) in paragraph (c), in the modified version of regulation 10(1)(e), after “(d)” insert “ , or does not inform the Authority of a major change in circumstances which is relevant to its meeting those conditions, as required by regulation 37 ”. (12) In regulation 16 (application to become an authorised electronic money institution where a financial limit is exceeded)— (a) for the heading substitute “ application for authorisation if requirements cease to be met ”; (b) for “referred to in regulation 8(2)(c) or (d) (as applied by regulation 15)”, substitute “ in regulation 13(3), (4), (8) or (9) ”. (13) In regulation 20 (safeguarding requirements)— (a) after paragraph (2) insert— (2A) An electronic money institution may safeguard certain relevant funds in accordance with regulation 21 and the remaining relevant funds in accordance with regulation 22. ; (b) in paragraph (6) for “Regulation 19 of the Payment Services Regulations 2009” substitute “ Regulation 23 of the Payment Services Regulations 2017 ”. (14) In regulation 21 (safeguarding option 1)— (a) in paragraph (2)(a) after “authorised credit institution” insert “ or the Bank of England ”; (b) after paragraph (4) insert— (4A) Notwithstanding paragraphs (1), (2), (3)(b) and (4), where an electronic money institution is a participant in a designated system and the institution holds an account at the Bank of England for the purposes of completing the settlement of transfer orders that have been entered into the designated system on behalf of electronic money holders— (a) funds held in the account pending settlement in accordance with the rules or default arrangements of the designated system, in respect of transfer orders that have been entered into the designated system on behalf of electronic money holders, may continue to be held in the account with relevant funds; (b) the account, or a specified amount of funds in the account, may be subject to an interest or right in favour of the Bank of England in order to ensure the availability of funds to complete the settlement of transfer orders in accordance with the rules or default arrangements of the designated system; (c) subject to paragraph (4B), funds received into the account by the electronic money institution upon settlement are to be considered as having been appropriately safeguarded in accordance with this regulation from the time of receipt in the designated system until the time of receipt into the account. (4B) The Authority may direct that paragraph (4A)(c) does not apply in relation to a designated system if, in the Authority's view, the rules and default arrangements of that system do not adequately insulate the funds of electronic money holders from the claims of other creditors of electronic money institutions which are participants in the system. ; (c) in paragraph (5)— (i) omit “and” after sub-paragraph (b); (ii) after sub-paragraph (c) insert— (d) any funds held in an account as permitted by paragraph (4A)(a); (e) any funds expected to be received into an account as described in paragraph (4A)(c) in respect of transfer orders that have been entered into the designated system; and (f) any funds received into an account as described in paragraph (4A)(c). ; (d) in paragraph (7) after the definition of “authorised custodian” insert— “default arrangements”, “designated system”, “rules”, “settlement”, “system” and “transfer order” have the same meanings as in the Financial Markets and Insolvency (Settlement Finality) Regulations 1999 . . (15) In regulation 22 (safeguarding option 2), in paragraph (1)(a)(ii) and (iii) after “a” insert “ comparable ”. (16) In regulation 24 (insolvency events)— (a) in paragraph (1)(b) after “21(2)(a) or (b)” insert “ or (4A), ”; (b) in paragraph (4), in the definition of “asset pool”, after paragraph (b) insert— (ba) where regulation 21(4A) applies, any funds that are received into the account held at the Bank of England upon settlement in respect of transfer orders that have been entered into the designated system on behalf of electronic money holders, whether settlement occurs before or after the insolvency event; ; (c) after paragraph (4) insert— (5) In paragraph (4) “designated system”, “settlement” and “transfer order” have the same meanings as in the Financial Markets and Insolvency (Settlement Finality) Regulations 1999. . (17) In regulation 26 (outsourcing)— (a) in paragraph (2)— (i) after “important operational function” insert “ , including provision of an information technology system ”; (ii) in sub-paragraph (a)(ii) after “monitor” insert “ and retrace ”; (b) in paragraphs 2(a)(ii), (b) and (c) and (3)(a) for “2009” substitute “ 2017 ”; (c) after paragraph (3) insert— (4) An authorised electronic money institution must notify the Authority without undue delay of any change in outsourced functions or the persons to which functions are outsourced. . (18) In regulation 28 (notice of intention)— (a) in paragraph (2), for sub-paragraphs (a) to (d) substitute— (a) states the name and address of the institution, and any authorisation or reference number; (b) identifies the EEA States in which it intends to operate; (c) identifies the electronic money issuance, redemption, distribution or payment services which it seeks to carry on in those States; (d) if the institution intends to use an agent to provide the services in any of those States, includes the information referred to in regulation 34(3) (requirement for agents to be registered); (e) if the institution intends to use an EEA branch to provide the services in any of those States, includes— (i) the information referred to in paragraphs 2 and 5 of Schedule 1 in relation to the services to be provided through each EEA branch; (ii) the names of those responsible for the management of each proposed EEA branch; and (iii) details of the organisational structure of each proposed EEA branch; (f) if the authorised payment institution intends to enter into a contract with a person in another EEA State under which that person will carry out any operational function relating to the issuance, distribution or issuance of electronic money or the provision of payment services in that EEA State, includes notification of that intention; and (g) identifies the distributors, if any, whom the institution intends to engage to distribute or redeem electronic money in exercise of its passport rights in that State. ; (b) for paragraphs (3) and (4) substitute— (3) If any of the information provided by an authorised electronic money institution in a notice of intention changes, including by the addition of a further branch, the institution must give the Authority notice of such changes in a further notice of intention. (4) The Authority must, within one month beginning with the date on which it receives a complete notice of intention, inform the host state competent authority of the information contained in the notice of intention. .