National Bank of Belgium Exemption Policy under Article 48 of the Law of 21 December 2009 (Payment Services)

NBB_2015_12 – 2 March 2015 Circular – Page 1/4 boulevard de Berlaimont 14 – BE-1000 Brussels tel. +32 2 221 38 12 – fax + 32 2 221 31 04 company number: 0203.201.340 RPM Brussels www.bnb.be Circular Brussels, 2 March 2015 Reference: NBB_2015_12 your correspondent:
Kurt Van Raemdonck tel. +32 2 221 53 39 – fax +32 2 221 31 04 kurt.vanraemdonck@nbb.be Exemption Policy of the Bank based on Article 48 of the Law of 21 December 2009 (payment services) Scope Legal persons exempted based on Article 48 of the Law of 21 December 2009 concerning the status of payment service institutions and electronic money institutions, access to the activity of payment service providers, the activity of issuing electronic money and access to payment systems (hereinafter "the Law"). Summary/Objectives This circular aims to clarify the framework governing the National Bank of Belgium's (hereinafter "the Bank") exemption policy based on Article 48 of the Law. Structure

1. Introduction of an exemption file
2. Scope of the exemption
3. Consequences of the exemption
4. Role of the approved auditor
   Madam, Sir,
   Based on Article 48 of the Law, legal persons offering payment services in Belgium may be exempted from the application of all or part of the provisions of Book 2 of the Law and its implementing decrees.
   Under Article 48 of the Law, the exemption may indeed be granted to legal persons:
   1° whose total average amount, for the previous twelve months, of payment transactions executed by them, or by any agent for whom they assume full responsibility, does not exceed 3,000,000 euros per month. This criterion is assessed with regard to the total amount of payment transactions planned in their business plan, and subject to any adjustment of this plan required by the Bank; and 2° whose any natural persons responsible for the management or exercise of the activity have not been convicted of offences related to money laundering, terrorist financing or referred to in Article 20, § 1, 1°, 2° and 3°, of the Banking Law.

Circular – Page 2/4 NBB_2015_12 – 2 March 2015 This circular aims to clarify the framework governing the Bank's exemption policy based on Article 48 of the Law. It replaces with immediate effect the communication NBB_2013_05 of 24 June 2013 on the same subject.

1. Introduction of the exemption file
   The following information must be provided by the applicant to enable the Bank to form an opinion on the applicant and to verify that the two legal conditions for exemption are met:

1. a programme of envisaged activities;
2. a business plan, including a financial plan for the first three financial years;
3. proof that the applicant has the initial capital referred to in Article 11;
4. a description of the measures for the protection of funds of payment service users;
5. a description of the internal control mechanisms adopted to comply with the obligations set out in Regulation (EC) No 1781/2006 1 and by the Law of 11 January 1993;
6. a description of the organisational structure of the applicant;
7. the identity of the shareholders;
8. the identity of the persons participating in the administration or management of the applicant, as well as of the persons who participate in the effective management of the payment services activity;
9. the identity of the auditor(s);
10. the legal form and statutes of the applicant;
11. the address of the registered office of the applicant.

2. Scope of the exemption
   Subject to acceptance of the exemption file, the Bank grants an exemption from all provisions of Book 2 of the Law, with the exception of the following provisions:

• Article 10, which requires that the exempted legal person be constituted in the form of a commercial company, with the exception of the form of private limited company constituted by a single person;
• Article 11, which concerns the minimum initial capital;
• Article 13, §§ 1 and 3, which concern the requirements of professional honour and adequate expertise. Exempted legal persons are required to respect Circular NBB_2013_02 2 in this regard. This circular specifies how the Bank proceeds with the "fit & proper" assessments, with regard to both the content and the process of the assessments;
• Article 16bis, which concerns the information obligation that exempted legal persons must respect towards the Bank within the framework of "fit & proper" assessments, as well as the Bank's prior approval in case of appointment. The circular mentioned in the previous point also applies;
• Article 17, §§ 1 and 2, paragraphs 2 to 5, concerning solvency obligations that must be respected by the exempted legal person 3;
  1 Regulation (EC) No 1781/2006 of the European Parliament and of the Council of 15 November 2006 concerning information on the order sender accompanying fund transfers.
  2 Circular NBB_2013_02 of 17 June 2013 concerning standards on professional expertise and honour for members of the Management Committee, administrators, heads of independent control functions and effective managers of financial institutions. 3 Article 17, § 2, paragraph 1, and the Decree of 5 February 2010 concerning the own funds of payment service institutions are, however, not applicable.

NBB_2015_12 – 2 March 2015 Circular – Page 3/4

• Article 20, concerning the execution of payment services through an agent;
• Article 21, concerning the exercise of activities other than payment services, where applicable subject to the Bank's prior authorisation;
• Article 22, which imposes on the exempted legal person the obligation to take measures to protect the funds received from payment service users for the execution of payment transactions;
• Title 2, Chapter 1, Sections 4 and 5 (Articles 25 to 38), concerning supervision and exceptional measures and sanctions with regard to exempted legal persons.
  By way of derogation from Article 28, paragraph 1, of the Law, the exempted legal person which primarily exercises commercial activities unrelated to the provision of payment services may, subject to the Bank's prior approval, entrust the functions of auditor to one or more auditors who have not been approved for this purpose by the Bank in accordance with Article 222 of the Banking Law 4. This auditor is required to comply with the obligations imposed by the Law and by this circular on the approved auditor (cf. in particular below, point 4. "Role of the approved auditor").

3. Consequences of the exemption
   Exempted legal persons, and, where applicable, their agents, are entered in a register kept for this purpose by the Bank. The website indicates that these legal persons are exempted.
   Furthermore, Article 48, § 3, of the Law provides that legal persons:
   1° have their registered office in Belgium, and effectively exercise their payment services activities on Belgian territory; 2° do not benefit from the mutual recognition regime provided for in Article 91 of the Law (no European passport); 3° inform the Bank of any change in their situation having an impact on the conditions set out in § 1 and report periodically to the Bank on the total average amount, for the previous twelve months, of payment transactions executed by them, or by any agent for whom they assume full responsibility; 4° apply the provisions of the Law of 11 January 1993 concerning the prevention of the use of the financial system for the purposes of money laundering and terrorist financing which are applicable to payment service institutions, and the decrees and regulations adopted for its implementation. Periodic reports to be made by exempted legal persons With regard to point 3 above, the legal person reports every six months to the Bank on the total average amount, for the previous twelve months, of payment transactions executed by it, or by any agent for whom it assumes full responsibility. The reporting mentioned above must be carried out by sending an Excel file through the application made available for this purpose by the Bank. The data must be communicated to the Bank no later than the first working day of the second calendar month following the end of the financial year. This transmission is repeated no later than the first working day of the second calendar month following the six calendar months after the previous reporting. 4 In its assessment, the Bank will take into account in particular the degree of specialisation of the respective activities and the risks associated with them, as well as the relative importance of payment services in the balance sheet and in the income statement.

Circular – Page 4/4 NBB_2015_12 – 2 March 2015 With regard to point 4 above, the exempted legal person is required to complete annually the abbreviated periodic questionnaire relating to the fight against money laundering and terrorist financing, in accordance with the procedures specified in Circular NBB_2014_12 5. Furthermore, persons responsible for effective management are required, in accordance with Article 22, § 4, paragraph 3, of the Law, to submit an annual report to the Bank, inter alia, on the measures taken in implementation of Article 22, §§ 1 and 2, of the Law, in order to protect the funds received from payment service users for the execution of payment transactions, and this through the application made available for this purpose by the Bank.
4. Role of the approved auditor
Based on Article 28 of the Law, the exempted legal person must appoint an auditor approved by the Bank 6.
The approved auditor must comply with its legal obligations regarding supervision, insofar as they are applicable based on the Bank's exemption policy 7.
In addition to its usual mission of verifying annual accounts, it must also, pursuant to Article 33, 5°, of the Law, report at least once a year to the Bank on the adequacy of the measures taken by the exempted legal person to preserve the funds received from payment service users, in application of Article 22, §§ 1 and 2. Finally, the Bank requires as a supplementary measure that the approved auditor declares every six months that the total average amount, for the previous twelve months, of payment transactions executed by the exempted legal person, or by any agent for whom it assumes full responsibility, does not exceed the ceiling of 3,000,000 euros per month. This is intended to guarantee the accuracy and authenticity of the exempted legal person's declaration regarding non-exceedance of this ceiling. A copy of this circular is sent to the auditor(s), reviewer(s) (approved), of the exempted legal person. Please accept, Madam, Sir, the expression of my distinguished sentiments. Mathias Dewatripont Vice-Governor 5 Circular NBB_2014_12 of 22 October 2014 concerning the abbreviated periodic questionnaire relating to the fight against money laundering and terrorist financing. 6 Cf. nevertheless above, point 2. "Scope of the exemption", fifth bullet, for the exception to this principle. 7 It should not, for example, assess the internal control measures, given the exemption provided for in Article 14 of the Law, which imposes adequate internal control.