The FSA said that it hoped the consultation paper would help to ‘establish a level playing field between prospective issuers of e-money, whether banks or other firms’.
David Strachan, director of deposit takers at the FSA, said: "The regime we are proposing is intended to encourage innovation. We believe it will help to build consumer confidence in a new and relatively untried means of payment."
Some of the key issues of the proposed framework for e-money issuers include the need for e-money issuers to only undertake e-money issuance or closely related activities. Issuers will need to ‘ring fence’ their e-money activities from other areas of business risk, and the FSA will be empowered to grant waivers from regulation to small or locally based firms, although these will still have to submit periodic information about their businesses.
Duncan Goldie-Scot, chairman of the Electronic Money Association (EMA) said: "This is an important step forward for e-money. The EMA is grateful for the open manner in which the FSA is addressing the needs of the industry. It welcomes the pragmatic nature of the regulatory framework and looks forward to full participation in the consultation process."
