The Central Bank of Cyprus has recently issued two new Directives targeted at Electronic Money Institutions in Cyprus in an effort to transpose European Directives into national legislation. These are namely:
- The Fitness and Probity of Board Members or Directors of Electronic Money Institutions Directive of 2025 (ΚΔΠ 165/2025); and
- Electronic Money Institutions Directive of 2025 (ΚΔΠ 166/2025)
The Fitness and Probity of EMI Board Members and Directors Directive:
Whereas prior to the enactment of this Directive the board members, directors and key personnel were assessed under the criteria established for licensed banking institutions, their fitness and probity must now meet the criteria set out in the newly issued Fitness and Probity of the Members of the Management Board, Directors and Managers of Payment Institutions Directive of 2025 (ΚΔΠ 164/2025).
The primary concept is that board members, senior executives, and other key personnel must demonstrate the necessary knowledge, expertise, experience, academic qualifications and ethical standards to carry out their duties effectively. The Directive aims therefore to determine the following:
- the policy and procedures for the assessment and re-evaluation of the suitability of the persons assessed;
- the criteria for the assessment of the suitability of the persons assessed;
- the measures applicable in cases where members of the management body or managers have been deemed no longer suitable; and
- the independence criteria for members of the management body.
The EMI Directive:
This Directive harmonizes Cypriot legislation with Directive 2009/110/EC of the European Parliament and of the Council on the taking up, pursuit and prudential supervision of the business of electronic money institutions and Directive (EU) 2015/2366 of the European Parliament and of the Council on payment services in the internal market (PSD2) and aims to:
- determine the composition of the initial capital and own funds of EMIs and set the limit of capital requirements that they must meet;
- define the safeguard arrangements that EMIs must apply to safeguard the funds they receive;
- specify the concept of “material change” in relation to the requirements for safeguarding the funds received by EMIs;
- determine the conditions that EMIs must meet for the purposes of granting credit in relation to payment services that they may provide on the basis of their license, and
- specify the concept of “operational and closely related ancillary services”, which are related to the issuance of electronic money or the provision of payment services.
These new Directives mark a significant development in the regulation of EMIs in Cyprus, bringing them into closer alignment with European standards and enhancing governance, prudential oversight, and consumer protection.
For any questions or a more detailed analysis of the implications of these Directives, please contact us at info@blegalcy.com.