Revised explanatory notes to the licence application form for payment service providers and electronic money institutions

The main changes to the explanatory notes to the application form for a licence as a payment service provider and electronic money institution are:

• A clearer description of the licensing procedure, consisting of a completeness phase and a substantive assessment phase; and
• An expanded explanation of the different methods for safeguarding third-party funds and the documents to be submitted in this context.

Licence procedure in two phases

The licence procedure consists of the following two phases:

• Phase 1: Verification of the completeness of your application.
  In this phase, DNB assesses whether the application is complete and whether all requested documents have been submitted. An incomplete application may lead to delays or, when essential documents are missing, to the application being dismissed.

• Phase 2: Substantive assessment of your application
  Only once the application is complete will DNB proceed to assess the substantive aspects, including, among other things, the set‑up of the organisation, sound and controlled business operations, governance, and the measures for safeguarding third-party funds.

It is important to note that DNB only processes applications that are submitted in full. If your application is incomplete, we will generally request the missing documents once during phase 1. If the application remains incomplete thereafter, phase 2 will not start, and your application may be dismissed. The applicable fees will remain due in that case.

We therefore advise you to ensure that your licence application is complete upon submission. Consulting the explanatory notes in advance increases the likelihood of submitting a complete application.

Safeguarding third-party funds

It is important that the payment service provider and the electronic money institution ensure that third‑party funds (funds of payment service users and electronic money users) remain separated from the company’s own funds. The institution can choose between three methods for safeguarding third‑party funds.

Choice of three methods

Method 1: customer accounts foundation

Method 2: segregated assets account

Method 3: insurance policy or guarantee

Required documents to be submitted in phase 1 (verification of the completeness of the licence application) relating to the safeguarding of third-party funds

Experience shows that, in licence applications where method 1 or method 2 applies, proof of an opened bank account in the name of the customer accounts foundation or the segregated assets account is frequently missing. This is unfortunate, as it may lead to significant delays in the assessment or even to the application being dismissed due to incompleteness.

In the revised explanatory notes it is therefore further specified which documents must be submitted for the safeguarding of third-party funds

Under methods 1 and 2, with regard to the safeguarding of third-party funds, either proof of an opened bank account or a bank‑signed statement (“commitment letter”) must be submitted confirming that the customer acceptance procedure has been completed and that the account has been opened and blocked or frozen until the licence is granted. The other documents to be submitted are listed in the explanatory notes.

Advice to applicants

To facilitate a smooth handling of your application DNB advises the following:

• Carefully read the explanatory notes and the relevant pages on dnb.nl before submitting your application.
• Verify that all required documents are complete and up to date, including the arrangements for safeguarding third-party funds (e.g. bank account for a customer account foundation or a segregated assets account) and the related documentation.
• Use the explanatory notes as a checklist when compiling your application file.