Law · European Union

EMD2: Directive 2009/110/EC on the taking up, pursuit and prudential supervision of the business of electronic money institutions

Directive 2009/110/EC (EMD2) is the European Union directive regulating electronic money institutions and the issuance of e-money across the internal market. It governs the authorization of full electronic money institutions (EMIs) and the registration of small EMIs under national exemption waivers, establishing uniform rules on initial capital, ongoing own funds, customer fund safeguarding, and redemption at par value.

Last verified 2026-09-24Markdown · Data (CC BY 4.0)
Directive 2009/110/EC on the taking up, pursuit and prudential supervision of the business of electronic money institutions: lawEMD2§

At a glance

Official titleDirective 2009/110/EC of the European Parliament and of the Council of 16 September 2009 on the taking up, pursuit and prudential supervision of the business of electronic money institutions amending Directives 2005/60/EC and 2006/48/EC and repealing Directive 2000/46/EC1
English titleDirective 2009/110/EC on the taking up, pursuit and prudential supervision of the business of electronic money institutions
CitationDirective 2009/110/EC
JurisdictionEuropean Union (applies in every EU/EEA state)
Typedirective
Adopted2009-09-16
In force from2009-10-30
Statusin force

Full text

Official full text: Directive 2009/110/EC on the taking up, pursuit and prudential supervision of the business of electronic money institutions (PDF, en)1 · 216 KB · file checked 2026-09-24 · consolidated version of 2018-01-13

Official page: eur-lex.europa.eu1

Summary

Directive 2009/110/EC (EMD2) establishes the European Union regulatory framework for electronic money issuance, prudential supervision, and market conduct. It applies to electronic money institutions (EMIs), credit institutions, post office giro institutions, the European Central Bank, and public authorities issuing electronic money across the European Economic Area. The directive creates two licensing statuses: fully authorized electronic money institutions and small electronic money institutions operating under optional national waiver regimes. Key obligations include maintaining initial capital of at least EUR 350,000 and ongoing own funds calculated under Method D (at least 2% of average outstanding electronic money) combined with PSD2 requirements for non-issuance payment services. Institutions must safeguard customer funds in separate low-risk assets or insurance guarantees within five business days, issue and redeem e-money at par value on demand without speculative holding conditions, and refrain from granting interest. EMD2 prohibits issuing e-money through agents and mandates prior regulatory approval for qualifying holding changes at 20%, 30%, and 50% ownership thresholds.

Summary written by the Atlas from the official text; the law itself prevails.

Main articles

  • Art. 1: Identifies eligible electronic money issuer categories and excludes limited payment networks and specific telecom-based payment transactions from scope.
  • Art. 2: Defines electronic money, electronic money institutions, electronic money issuers, and average outstanding electronic money.
  • Art. 3: Applies PSD2 governance mutatis mutandis, mandates prior approvals for qualifying holdings (20%, 30%, 50%), and forbids issuing e-money via agents.
  • Art. 4: Obliges electronic money institutions to hold initial capital of not less than EUR 350,000 at the time of regulatory authorization.
  • Art. 5: Sets ongoing own funds requirements for e-money issuance at 2% of average outstanding electronic money (Method D) plus PSD requirements.
  • Art. 6: Permits EMIs to offer payment services and granting linked credit from own funds, while strictly prohibiting deposit-taking.
  • Art. 7: Requires safeguarding of customer funds received for electronic money issuance into secure low-risk assets within five business days of issue.
  • Art. 8: Governs relations with third countries, forbidding more favourable treatment to branches of third-country electronic money institutions.
  • Art. 9: Allows Member States to grant optional exemptions to small EMIs with average outstanding e-money up to EUR 5,000,000 without passporting.
  • Art. 10: Strictly prohibits any natural or legal persons who are not recognized electronic money issuers from issuing electronic money.
  • Art. 11: Mandates issuance of electronic money at par value on receipt of funds and redemption at par value at any moment on request.
  • Art. 12: Prohibits the granting of interest or any other benefit linked to the duration of holding electronic money.
  • Art. 16: Establishes the principle of full harmonisation across Member States for the matters governed by the directive.
  • Art. 18: Lays down transitional regimes and grandfathering provisions for existing institutions operating under previous directives.

Licences it governs

Regulators that apply it

Upcoming changes

  • 18 months post-adoption: Directive 2009/110/EC will be repealed and merged into the Payment Services Directive 3 (PSD3, COM(2023) 366), unifying EMI and payment institution regimes.2
Last verified 2026-09-24Author Danil Marmysh, Founder & CEO, ProtegraReviewed by Anastasia Sidorenkova, Head of Licensing, ProtegraReport an errorReference information, not legal advice.

Sources

  1. EUR-Lex: CELEX 32009L0110 · retrieved 2026-09-24
  2. EUR-Lex: CELEX 52023PC0366 · retrieved 2026-09-24

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