EMI authorisation is the FCA permission that lets a firm issue electronic money in the United Kingdom under the Electronic Money Regulations 2011 (EMRs 2011). Bratby Law advises firms on the full authorisation lifecycle: product classification, choosing between authorisation as an electronic money institution and registration as a small electronic money institution, preparing the FCA application, capital and safeguarding arrangements, and post-authorisation compliance. Our Managing Partner serves as General Counsel to UK Payments Initiative Limited, giving clients direct operator-side insight into how payments regulation works in practice.

Do I need FCA authorisation to issue e-money?

You need FCA authorisation or registration if your product is electronic money within regulation 2 of the EMRs 2011: electronically stored monetary value, represented by a claim on the issuer, issued on receipt of funds for the purpose of making payment transactions, and accepted by persons other than the issuer. Stored value wallets, prepaid card programmes and multi-merchant credit balances commonly meet this definition even where the firm does not describe its product as e-money.

A firm may build a product on the assumption that it provides payment services under the Payment Services Regulations 2017 (PSRs 2017) when the product in fact constitutes electronic money and requires a different authorisation route. The reverse error also arises. The two regimes carry different capital requirements, different application content and different ongoing obligations, so a misclassification discovered late in an FCA application is expensive to unwind. Our regulatory perimeter and market entry service addresses this question before an application is prepared.

Authorised EMI or small EMI: which route?

The EMRs 2011 provide two routes: authorisation as an electronic money institution (an authorised EMI, sometimes abbreviated AEMI) and registration as a small electronic money institution (small EMI). The right route depends on projected e-money float and payment volumes. A small EMI must satisfy the conditions in regulation 13 of the EMRs 2011: total business activities must not generate average outstanding electronic money exceeding EUR 5,000,000, monthly average payment transactions unrelated to e-money issuance must not exceed EUR 3,000,000, and the business must not include account information services or payment initiation services. An authorised EMI faces no equivalent volume limits.

Requirement	Authorised EMI	Small EMI
FCA status	Authorised (EMRs 2011, reg 6)	Registered, not authorised (EMRs 2011, reg 13)
Average outstanding e-money	No limit	Maximum EUR 5,000,000 (reg 13(3))
Unrelated payment transactions	No limit	Maximum EUR 3,000,000 monthly average (reg 13(4))
Account information and payment initiation services	Permitted, with professional indemnity insurance (reg 6(6)(e) and (f))	Not permitted (reg 13(4A))
Initial capital	EUR 350,000 (Schedule 2, paragraph 2)	None below EUR 500,000 average outstanding e-money; 2% of average outstanding e-money at or above it (Schedule 2, paragraph 3)
Ongoing own funds	Method D: 2% of average outstanding e-money (Schedule 2, paragraph 23)	2% of average outstanding e-money where regulation 19(2) applies (Schedule 2, paragraph 14)
Safeguarding	Required (regs 20 to 22)	Required (regs 20 to 22)

These thresholds are set in euros in the EMRs 2011, reflecting their EU legislative origin. A firm approaching the small EMI ceilings should plan its upgrade to full authorisation well before it reaches them, because the authorised EMI application is substantially heavier and the FCA determination period runs from the date the completed application is received.

What does an EMI authorisation application involve?

An applicant for authorisation must satisfy the conditions in regulation 6 of the EMRs 2011. The core requirements are a UK body corporate with its head office in the United Kingdom, robust governance arrangements with clear lines of responsibility, effective risk management and internal controls, directors and managers of good repute with appropriate knowledge and experience, fit and proper controllers of any qualifying holding, a business plan including a forecast budget for the first three years, and adequate safeguarding measures under regulation 20. Where the applicant is required to register under the Money Laundering Regulations 2017, registration must be in place.

The FCA must determine a completed application within three months of receiving it under regulation 9 of the EMRs 2011, and any incomplete application within twelve months. Applications that generate substantial FCA information requests take longer, because the three-month period runs only from receipt of the completed application; the quality of the initial submission sets the realistic timeline. The regulatory business plan, safeguarding documentation, financial projections and governance map need to be consistent with each other; inconsistencies between documents are the most common source of FCA questions.

What are the capital requirements for EMI authorisation?

An authorised EMI must hold initial capital of at least EUR 350,000 under Schedule 2 to the EMRs 2011, and ongoing own funds calculated under Method D as 2% of average outstanding electronic money. Where an authorised EMI also provides payment services unrelated to e-money issuance, it calculates a separate own funds requirement for that business under Method A, B or C as the FCA directs. A small EMI holds no initial capital where its average outstanding e-money is below EUR 500,000; at or above that figure it must hold initial capital equal to 2% of average outstanding e-money. The FCA may direct own funds adjustments of up to 20% in either direction following an evaluation of the institution.

How does safeguarding work for e-money issuers?

E-money issuers must safeguard funds received in exchange for e-money under regulation 20 of the EMRs 2011. Regulation 20(1) imposes the safeguarding duty, and regulation 20(2) requires relevant funds to be safeguarded by segregation under regulation 21 or by insurance or comparable guarantee under regulation 22; an institution may combine the two methods across different funds. Adequate safeguarding measures are also an authorisation condition, so safeguarding design belongs in the application, not after it.

The statutory duty is supplemented by the FCA’s CASS 15 rules, in force since 7 May 2026, which impose operational requirements including daily reconciliation of the e-money float, monthly regulatory returns, an annual safeguarding audit and a designated individual responsible for safeguarding compliance. These operational rules apply to authorised EMIs and small EMIs alike. Applicants should design their safeguarding operations to the CASS 15 standard from the outset. Our Safeguarding and Consumer Duty page covers the regime in depth.

EMI or payment institution: which authorisation do I need?

A firm that issues electronic money needs EMI authorisation or small EMI registration; an EMI can also provide payment services without separate PSRs 2017 permission. A firm that moves money without issuing stored value needs authorisation as a payment institution or registration as a small payment institution under the PSRs 2017, where initial capital ranges from EUR 20,000 for money remittance to EUR 125,000 for the main payment services under Schedule 3. A small payment institution faces the same EUR 3,000,000 monthly average transaction ceiling as the small EMI’s unrelated payments limit. Our Payment Institution Authorisation and Licensing page covers payment institution authorisation in detail.

How Bratby Law helps with EMI authorisation

For firms entering the market, we classify the product against the regulation 2 definition, recommend the authorisation route, and prepare the FCA application including the regulatory business plan, safeguarding framework and governance documentation. For authorised firms, we advise on perimeter changes, safeguarding compliance, agent and distributor arrangements, and FCA supervisory correspondence. Where the FCA raises concerns, our FCA Investigations and Enforcement practice responds.

Clients work directly with a Managing Partner who combines advisory experience with operator-side perspective. Our Fractional General Counsel work in the payments sector means we see how authorisation conditions and safeguarding obligations operate inside a regulated business, and that experience shapes the advice on safeguarding method, own funds calculation and governance design. We deliver EMI authorisation support through Direct Legal Advice for firms instructing us directly and Specialist Co-counsel for law firms and consultancies needing payments regulatory depth.

Frequently asked questions about EMI authorisation

What is electronic money under UK law?

Electronic money is defined in regulation 2 of the EMRs 2011 as electronically stored monetary value, represented by a claim on the issuer, issued on receipt of funds for the purpose of making payment transactions, and accepted as payment by persons other than the issuer. Prepaid cards, stored value wallets and similar float-holding products typically fall within the definition.

What is the difference between an authorised EMI and a small EMI?

An authorised electronic money institution (authorised EMI) holds full FCA authorisation with no volume limits and initial capital of EUR 350,000. A small EMI is registered with the FCA rather than authorised, subject to a maximum average outstanding e-money of EUR 5,000,000, a EUR 3,000,000 monthly ceiling on unrelated payment transactions, and no account information or payment initiation services. Both routes carry the same safeguarding duty under regulations 20 to 22 of the EMRs 2011.

How long does FCA authorisation as an EMI take?

The FCA must determine a completed application within three months under regulation 9 of the EMRs 2011, and an incomplete application within twelve months. The practical timeline depends on application quality: FCA information requests extend the process because the three-month period runs from receipt of the completed application. Well-prepared applications with consistent business plans and safeguarding documentation move materially faster.

What are the capital requirements for EMI authorisation?

An authorised EMI must hold initial capital of at least EUR 350,000 under Schedule 2 to the EMRs 2011, plus ongoing own funds of 2% of average outstanding e-money under Method D. A small EMI holds initial capital of 2% of average outstanding e-money only where that average is EUR 500,000 or more.

Do I need an EMI licence or a payment institution licence?

If your product stores customer value on account for future payments, you are likely issuing electronic money and need EMI authorisation or small EMI registration. If you move funds without holding stored value, for example money remittance or payment initiation, you need payment institution authorisation or small payment institution registration under the PSRs 2017. The classification depends on the product’s legal structure rather than its branding, and errors usually surface only once the FCA application is under way.

Can I distribute e-money through agents?

An EMI may distribute and redeem e-money through distributors and agents under regulation 33 of the EMRs 2011, but it may not issue e-money through them: issuance stays with the institution. Agents providing payment services must be registered with the FCA, and regulatory responsibility for distributor and agent conduct stays with the institution, so the arrangements need contractual controls covering safeguarding, conduct and anti-money laundering compliance.

How does the CASS 15 regime affect EMIs?

The FCA’s CASS 15 rules, in force since 7 May 2026, supplement the statutory safeguarding duty in regulation 20 of the EMRs 2011 with operational requirements: daily reconciliation of the e-money float, monthly returns, an annual safeguarding audit and a designated individual responsible for safeguarding. They apply to authorised EMIs and small EMIs alike, and the FCA tests firms against them in supervision.

What is the e-money redemption right?

E-money holders have a statutory right to redeem the monetary value of their e-money at par value at any time under regulation 39 of the EMRs 2011, which also requires issuers to issue e-money at par value on receipt of funds. Redemption terms must be set out in the contract with the e-money holder, and fees may be charged only in the limited circumstances the regulations permit. Redemption design affects both the customer contract and the safeguarding calculation, so the two need to be developed together.

Related payments regulation pages

See also our other payments regulation pages:

• Payments Regulation
• Payment Institution Authorisation and Licensing
• Open Banking and Variable Recurring Payments
• PSR and Scheme Governance
• Operational Resilience and DORA
• Safeguarding and Consumer Duty
• FCA Investigations and Enforcement

Independent directory rankings

Our specialist expertise is recognised in major independent legal directories:

• Chambers & Partners: Rob Bratby is ranked as a Band 2 lawyer in the UK Guide 2026 in the “Telecommunications” category: Chambers
• The Legal 500: Rob Bratby is listed as a Leading Partner for Telecoms in London (TMT: IT and Telecoms). The Legal 500
• Lexology: Rob Bratby is recognised in the Lexology Index as a Global Elite Thought Leader for telecoms and media, and as a Thought Leader for data privacy and protection: Lexology