• PRU 3.6A PRU 3.6A Capital Requirement for Providing Money Services

    • PRU 3.6A.1 PRU 3.6A.1

      Subject to Rule 3.6A.7, an Authorised Person with a Financial Services Permission enabling it to carry on the Regulated Activity of Providing Money Services must calculate the Capital Requirement for each activity it undertakes as the highest of:
      (a) the applicable Base Capital Requirement as set out in Section 3.3; and
      (b)
      (i) where it undertakes currency exchange the Expenditure Based Capital Minimum as set out in Section 3.7;
      (ii) for a Money Remitter:
      (A) the Expenditure Based Capital Minimum as set out in Section 3.7; and
      (B) the Variable Capital Requirement calculated in accordance with Rule 3.6A.2;
      (iii) for a Payment Account Provider the Variable Capital Requirement calculated in accordance with Rule 3.6A.4; or
      (iv) for a Stored Value Provider the Variable Capital Requirement calculated in accordance with Rule 3.6A.6.

      • Guidance

        Where an Authorised Person undertakes two or more of the activities under the Regulated Activity of Providing Money Services at the same time, Rule 3.6A.6 specifies how the overall Capital Requirement for those activities should be calculated.

    • Money Remitters

      • PRU 3.6A.2

        A Money Remitter must calculate its Variable Capital Requirement as the sum of the following:
        (a) 1.25% of the first $10 million of monthly payment volume;
        (b) 0.5% of the next $90 million of monthly payment volume;
        (c) 0.25% of the next $150 million of monthly payment volume; and
        (d) 0.125% of any remaining monthly payment volume.

      • PRU 3.6A.3

        (1) Subject to (2), monthly payment volume for a Money Remitter must be calculated as the total value of funds remitted by the Authorised Person in its preceding financial year divided by twelve.
        (2) Where the Authorised Person has not completed a full financial year following its authorisation, the monthly payment volume must be calculated using the value of realised funds remitted since its authorisation and the projections contained in its business plan for the remainder of the financial year, subject to any adjustments required by the Regulator.

    • Payment Account Providers

      • PRU 3.6A.4

        A Payment Account Provider must calculate its Variable Capital Requirement as the sum of the following:
        (a) 2.5% of the first $10 million of monthly payment volume;
        (b) 1% of the next $90 million of monthly payment volume;
        (c) 0.5% of the next $150 million of monthly payment volume; and
        (d) 0.25% of any remaining monthly payment volume.

      • PRU 3.6A.5 PRU 3.6A.5

        (1) Subject to (2), monthly payment volume for a Payment Account Provider must be calculated as the total value of Payment Transactions executed by the Authorised Person in its preceding financial year divided by twelve.
        (2) Where the Authorised Person has not completed a full financial year following its authorisation, the monthly payment volume must be calculated using the value of realised Payment Transactions since its authorisation and the projections contained in its business plan for the remainder of the financial year, subject to any adjustments required by the Regulator.

        • Guidance

          1. Under Rules 3.6A.3(2) and 3.6A.5 (2), the projections for the remainder of the year should be informed by the value of realised funds remitted or Payment Transactions following the authorisation of the Authorised Person.
          2. The monthly payment volume should be split into tranches, with the first $10mn being assigned to the first tranche, the next $90mn to the second tranche and so on
          3. The portion of the Variable Capital Requirement for each tranche is then calculated by multiplying the monthly payment volume in each tranche by the percentage factor associated with that tranche and then summing those portions to derive the overall Variable Capital Requirement.
          4. Examples of the calculation of the Variable Capital Requirement follow for an Authorised Person acting as solely a Money Remitter or a Payment Account Provider, in both cases with a monthly payment volume of $120mn.
           
          Tranche
           
          Monthly payment volume ($mn)
          Activity
          Money Remitter Payment Account Provider
          0 < … ≤ 10 10 1.25% * 10 = 0.125 2.5% * 10 = 0.250
          10 < … ≤ 100 90 0.5% * 90 = 0.450 1%* 90 = 0.900
          100 < … ≤ 250 20 0.25% * 20 = 0.050 0.5%* 20 = 0.100
          … > 250 - - -
          Total 120  
          Variable Capital Requirement($mn) 0.625 1.250

    • Stored Value Providers

      • PRU 3.6A.6 PRU 3.6A.6

        (1) Subject to (2), a Stored Value Provider must calculate its Variable Capital Requirement as 2.5% of the average daily outstanding Stored Value, calculated on the first Business Day of each calendar month and using the outstanding Stored Value at the end of each calendar day over the preceding six calendar months.
        (2) Where the Authorised Person has not completed six months of operations following its authorisation, the average daily outstanding Stored Value must be calculated using the daily outstanding Stored Value since its authorisation and the projections contained in its business plan for the remainder of the six-month period, subject to any adjustments required by the Regulator.

        • Guidance

          Under (2), the projections for the remainder of the six-month period should be informed by the value of realised daily outstanding Stored Values following the authorisation of the Authorised Person.

    • Multiple activities under Providing Money Services

      • PRU 3.6A.7 PRU 3.6A.7

        (1) Subject to (2), an Authorised Person undertaking more than one of the activities of being a Money Remitter, a Payment Account Provider and a Stored Value Issuer must calculate its Total Variable Capital Requirement by summing the Variable Capital Requirements calculated under Rules 3.6A.2, 3.6A.4 and 3.6A.6 as appropriate.
        (2) An Authorised Person acting as both a Money Remitter and a Payment Account Provider must calculate its overall Variable Capital Requirement for the related activities by adding together the monthly payment volumes for those activities and undertaking the calculation in Rule 3.6A.4.

        • Guidance

          An example of the calculation of the Variable Capital Requirement follows for an Authorised Person acting at the same time as a Money Remitter and a Payment Account Provider, with monthly payment volumes of $90mn and $120mn respectively for these activities, i.e. a total monthly payment volume of $210mn.
          Tranche Monthly payment volume ($mn) Money Remitter and Payment Account Provider
          0 < … ≤ 10 10 2.5% * 10 = 0.250
          10 < … ≤ 100 90 1% * 90 = 0.900
          100 < … ≤ 250 110 0.5% * 110 = 0.550
          … > 250 - -
          Total 210  
          Variable Capital Requirement ($mn) 1.700

           

      • PRU 3.6A.8 PRU 3.6A.8

        An Authorised Person undertaking more than one of the activities under Providing Money Services must calculate its Capital Requirement as the highest of, where applicable;
        (i) the Base Capital Requirement as set out in Section 3.3;
        (ii) the Expenditure Based Capital Minimum calculated in accordance with Rule 3.7.1; and
        (iii) the Total Variable Capital Requirement.

        • Guidance

          The Total Variable Capital Requirement for an Authorised Person is the aggregate of the Variable Capital Requirements calculated in accordance with Rules 3.6A.2, 3.6A.4, 3.6A.6 and 3.6A.7 as appropriate.