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EMI Licence in the UK
The UK Electronic Money Institution (EMI) licence, granted by the Financial Conduct Authority (FCA), has become a cornerstone for fintech innovation since its introduction under the Electronic Money Regulations 2011. Designed to enable companies to issue electronic money and provide payment services, UK EMI licence has been granted more times than all of EU’s countries combined.
Over the past six years, Fintheo’s licensing team has secured 41 UK EMI licenses for our clients. We have been constantly evolving together with the electronic money regulation in the UK thoroughly understanding FCA’s approach throughout the years, allowing our clients to grow through Competence. Prudence Result.
Post-Brexit
A key change for the UK EMI licence post-Brexit is the loss of passporting rights, which previously allowed firms to operate across the 30 countries of European Economic Area (EEA).
EU clients can now be served under strict reverse solicitation rules, meaning the client must initiate the relationship without any marketing - an approach that’s legally risky yet hard to trace. Correspondent banks further limit this by typically allowing e-money institutions to serve not more than a certain percentage of EU-based clients.
On the upside, UK EMIs can now safeguard clients’ funds with credit institutions outside the EEA, as long as the banks meet the FCA’s regulatory standards.
While EU passporting is over, the UK authorisation now presents a much more valuable asset for a global fintech.
Brexit: See the E-money, Payment Services and Payment Systems (Amendment and Transitional Provisions) (EU Exit) Regulations 2018 for further clarification.
EMI (E-money) Permissions in the UK
The UK's regulatory framework has retained the structure of relevant EU payment and e-money directives, which now form a part of UK domestic law:
UK Electronic Money Regulations 2011 (EMRs)
UK Payment Services Regulations 2017 (PSRs)
Small EMI (SEMI) licence
SEMI licence is a simplified category of an electronic money institution, designed for firms with smaller operations. To qualify, the firm must issue less than €5 million in e-money on average over a rolling 6-month period and have individual payment transaction volumes below €3 million per month.
SEMIs benefit from lighter regulatory requirements, the absence of initial capital, no requirement to publish audited accounts, and a faster authorisation process.
Key SEMI differences from AEMI:
- SEMI is explicitly limited to the UK.
- €3 million – max. average monthly total of payment transactions over the previous 12 months (then – a mandatory authorisation to AEMI).
- €0 share capital requirements (be ready to show at least €50,000 of available funds, though to demonstrate adequacy of resources).
SEMI licence is great for startups seeking to launch quickly and is generally seen as a stepping stone to becoming an authorised EMI.
Time frames
Historically, most of our 41 UK EMI applications took 3 to 6 months to be approved, depending on the business of the FCA. However, in 2024 the timeline has lengthened to 9 months. While all documents needed for submission to the regulator are usually prepared within 6-8 weeks, with Fintheo guiding and supporting the client throughout each step of the process, we recommend planning for a 12-month total turnaround time, given regulatory shifts and the increased scrutiny now applied.
- Under 21 business days – assigning an FCA case officer
- 6-8 weeks – drafting the application
- 3-12 months – official FCA application review period
Fintheo consultants have a proven track record of securing UK EMI licences in as little as 3 months.
Requirements
When applying for an EMI licence, the FCA expects you to be ready, willing and organised. A more detailed breakdown of this can be found below:
UK Electronic Money Regulations 2011 (EMRs)
1. A legal entity – a registered UK limited company with a SIC code of 64999. FCA recognises the following legal structures for EMI applications: Private Limited Company (Ltd), Limited Liability Partnership (LLP), Partnership, Trust.
2. Initial capital requirement – a minimum of €350,000 in own funds, recommended to be increased to €500,000+ (the exact figure being the funds needed to run the business before breaking even). The owner must ensure that the fund amount does not ever fall below the €350,000 mark. The capital needs to be paid into the EMI’s bank account in the form of fiat money from genuine sources and never in the form of any other assets.
3. At least 4 key individuals – residents of the UK that can demonstrate experience, integrity, and competence. See “Key individuals” below.
4. Source of wealth (SoW) – the Ultimate Beneficiary Owner (UBO) must show the clear genuine source of the total amount of initial capital he is committing to the business. The origin of funds must be of legitimate nature, and supporting documentation must be provided to demonstrate it.
5. Safeguarding bank account – or other safeguarding arrangements (insurance) before the application is submitted. See “Safeguarding Bank Account” below.
6. Software solution – an IT infrastructure with detailed technical documentation. See “Software” below.
Scope of work
Our work is structured in four key Stages to ensure a smooth and efficient EMI licence application process.
What we will need from you
While we will handle the majority of the application process, your input and cooperation are essential. In particular, there are a few key matters that will need to be completed directly by you:
- Provide the Source of Wealth (SoW) for the ultimate beneficial owner (UBO), as required for regulatory due diligence.
- Recruit at least four key management individuals (e.g. directors, MLRO, CEO, etc.); we can assist with this via Fintheo.Recruitment, for an additional fee.
- Select your software provider and supply the relevant technical documentation. Alternatively, you may opt to use our software solution, which has already been successfully used in regulatory applications.
- Complete our business questionnaire, which gathers essential information about your business model, services, and future plans.
- Choose 3rd party vendors involved in operation of your business (e.g., banks, PSPs, liquidity providers, AML/CTF software, Cloud server providers).
We will guide you through each step, but your timely involvement in these areas will ensure a smooth and efficient application process.
Safeguarding account, SEPA and SWIFT
Before submitting your EMI licence application, the FCA requires that you have a safeguarding measure in place, most often customers choose a bank account as a safeguarding measure and you must provide a formal evidence of the availability of a safeguarding account with your application.
One of the main challenges here is that most banks are reluctant to open safeguarding accounts for unlicensed firms making this step a common bottleneck. To solve this, we introduce you to our network of trusted partner banks who are willing to support EMI applicants at the pre-licence stage. They can open all three accounts: business, safeguarding and, if required, a segregated account for individual IBANs.
The same banks would provide you with access to SEPA and SWIFT networks. After authorisation, you are free to approach additional providers as needed.
Beneficiary Owner (UBO) requirements
The FCA places particular scrutiny on the controllers - Ultimate Beneficial Owner (UBO) of an EMI: they must be able to demonstrate the legitimate source of wealth, as well as clear, transparent ownership structure. While the UBO is not required to be involved in day-to-day operations, they must be deemed fit and proper, any history of financial misconduct, sanctions, or regulatory issues must be disclosed to the regulator.
The FCA will also assess whether the UBO has any other passports, side agreements or is related to any other regulated company.
The Key Individuals (e.g., directors)
The most common set of EMD individuals appointed by UK EMIs includes the CEO, MLRO, CFO, and CTO. In practice, they must meet several strict, unwritten expectations:
- key individuals are generally required to be UK residents
- have at least four years of relevant managerial experience
- and a minimum of one year working in a UK financial or credit institution.
These informal standards make it extremely difficult to appoint key individuals from abroad, as the FCA places strong emphasis on local experience and familiarity with the UK regulatory environment.
Remember: Every director of an EMI needs to become an EMD individual, but not every EMD individual needs to become a director.
The software requirements
There are typically three routes to solving the software challenge for an EMI:
- purchasing a Software-as-a-Service (SaaS) solution
- buying the source code
- or developing a custom platform yourself.
Whichever way you choose you would need to make sure the IT solution has a vast set of technical documentation to accompany it, which we will use thoroughly to accompany the application.
Not sure which software to choose? Fintheo offers a robust, compliant platform that fully meets the FCA’s requirements as well as the UK’s Digital Operational Resilience standards - Fintheo OS. We provide full installation, support, and ongoing upkeep - giving you a reliable, audit-ready solution from day one.
Digital operational resilience standards in EMI software
While DORA itself is not directly applicable in the UK, the FCA has taken a similar stance by requiring firms to demonstrate strong operational resilience, particularly in areas such as incident response, third-party risk management, business continuity, and IT security governance.
For EMI applicants, this means that software providers, infrastructure, and internal processes must meet the new standards.
About Us
We are a team of former MLROs, compliance officers, and fintech and regtech professionals, dedicated to guiding firms through the regulatory landscape. Since 2019, out team actively supported customers in building, scaling and expanding fintech businesses by providing a full suite of consulting services.
Our commitment to provide end-to-end support for businesses pursuing regulated activities led to the creation of Fintheo. We are a tech driven company that thrives to offer impeccable service to customers. As part of our proposition we also offer purpose-built e-money software platform which is fully DORA-compliant. In 2022, we expanded our services to include Fintheo.Recruitment, a division focused on sourcing fit and proper individuals for director and management roles to support clients during the licensing process.
Fintheo. Competence. Prudence. Result.
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