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16 May 2013 Supervision Supervision label Factsheet

An undertaking can qualify as an exchange institution only if its intended activities constitute currency exchange transactions. A currency exchange transaction, as defined in Section 1:1 of the Financial Supervision Act (Wet financieel toezicht or Wft), includes:

A - A money exchange transaction

This includes both the exchange of coins or banknotes of one currency for coins and banknotes of another currency and the exchange of coins or banknotes of a given currency for coins or banknotes of the same currency, for example the exchange of small for large denominations or vice versa.

B - Disbursement of coins or banknotes

The disbursement of coins or banknotes (in other words cash) on presentation of a credit card or in exchange for the handing over of a document issued by a payment service provider for the purpose of making funds available to a beneficiary (holder of the document), such as:

  • a paper cheque;
  • a bill of exchange;
  • a paper voucher;
  • a paper traveller's cheque; or
  • a paper money order.

Difference vis-à-vis payment services

Payment service providers and payment institutions, and the services provided by each of them (including money transmission or remittance) are differently defined in the Wft, and subject to different licence requirement than exchange institutions. Although payment institutions (i.e. authorised payment service providers) may under specific circumstances effect exchange transactions, the reverse does not apply: an authorised exchange institution may not perform payment services, such as money remittance.

Related law and regulations

Relevant to:

  • Exchange transaction