Question ID
2019_5019
Legal act
Directive 2015/2366/EU (PSD2)
Topic
Authorisation and registration
Article
3
COM Delegated or Implementing Acts/RTS/ITS/GLs/Recommendations
Not applicable
Article/Paragraph
Not applicable
Type of submitter
Individual
Subject matter
Online foreign exchange
Question

Does the business of foreign currency exchange-Forex require an authorisation as payment institution under PSD2, provided that: (a) the currency exchange takes place via online exchange platform; and (b) the client deposits certain base in cash or sends it by bank transfer to a bank account of the Forex company; and (c) the client receives the quote (exchanged) currency in an online client account in the platform from where the exchanged amount may be sent to a client's bank account or may be withdrawn in cash at the Forex company's offices?

Background on the question

A Forex company is intending to provide an online foreign currency exchange platform with the following features: (a) clients will be able to register on a website and open an online client account (analytical account) in the online platform. This account will NOT be a payment account because the client will NOT be able to execute payment transactions directly with this client account (the payment transactions will be executed only via payment services provider - a credit institution as noted below); (b) clients will be able to exchange foreign currency online by taking the following steps: Step 1: The client deposits certain base currency in cash or by bank transfer to a bank account of the Forex company. The Forex company keeps all funds transferred to its bank accounts with a licensed credit institution and does not itself maintain or hold payment accounts; Step 2: The Forex company reflects the deposit/transfer done by the client under Step 1 in the client's online account (analytical account); Step 3: The client submits an order via the online platform for currency exchange; Step 4: The Forex company provides a quote for the exchange and, if the client agrees, the foreign exchange occurs and it is reflected in the online client account (analytical account); Step 5: The client decides how and when to receive the exchanged amount - the receipt may be done in cash in one of the Forex company's offices or the client may indicate a bank account to which the exchanged funds are to be sent by the Forex company.

Submission date
Rejected publishing date
Rationale for rejection

Please note that as part of adjustments to the Single Rulebook Q&A process, agreed by the EBA and the European Commission, it has been decided to reject outstanding questions submitted before 1 January 2020, when the Q&A process was updated as part of the last ESAs Review. In particular, the question that you have submitted has now regrettably been rejected and will not be addressed.

If you believe your question would still benefit from clarification, you are invited to resubmit your question, adapting it to reflect any legislative, regulatory or other relevant developments that may have occurred since the initial date of submission. The EBA will aim to address resubmitted questions as a matter of priority. When considering to resubmit, you are kindly requested to observe the updated admissibility criteria agreed in the context of the adjustment of the Q&A process, available in the Additional background and guidance for asking questions. We hope for your understanding.

For further information please refer to the press release and the updated Q&A page.

Status
Rejected question