Regulation of 10 April 2018 of the National Bank of Belgium concerning the own funds of payment institutions

Title

2018A12004

APRIL 10, 2018. - Regulation of April 10, 2018, of the National Bank of Belgium concerning the own funds of payment institutions (NOTE: Consultation of previous versions from 08-05-2018 and updated on 17-06-2026)

Source: Finances

Publication: May 8, 2018

Number: 2018A12004

Page: 38525

File number: 2018-04-10/01

Entry into force: May 8, 2018

This text modifies the following text:

2010A03085

1 archived version

Table of Contents

Section 1.

• General provision, definitions and scope Art. 1-3 Section 2.
• Own funds Art. 4-8 Section 3.
• Ratios and solvency standards Art. 9-10 Section 4.
• Levels of application of requirements Art. 11 Section 5.
• Final provisions Art. 12-13

Text

Section 1.

• General provision, definitions and scope

Article

1. This regulation ensures the partial transposition of Directive (EU) 2015/2366 of the European Parliament and of the Council of 25 November 2015 on payment services in the internal market, amending Directives 2002/65/EC, 2009/110/EC and 2013/36/EU and Regulation (EU) No 1093/2010, and repealing Directive 2007/64/EC.

Art.

2. For the purposes of this regulation, the following definitions apply: 1° "the Law": the Law of 11 March 2018 on the status and supervision of payment institutions and electronic money institutions, access to the activity of payment service provider, the activity of issuing electronic money and access to payment systems; 2° "the Bank": the National Bank of Belgium; 3° "Regulation No 575/2013": Regulation (EU) No 575/2013 of the European Parliament and of the Council of 26 June 2013 on prudential requirements for credit institutions and investment firms and amending Regulation (EU) No 648/2012; 4° "the Regulation of 4 March 2014": the regulation of the National Bank of Belgium of 4 March 2014 on the implementation of Regulation (EU) No 575/2013 of the European Parliament and of the Council of 26 June 2013; 5° "group": a group of undertakings within the meaning of Article 2, 42° of the Law.

Art.

3. The provisions of this regulation apply to payment institutions under Belgian law.

Section 2.

• Own funds

Art.

4. The own funds of the payment institution must at all times be at least equal to the amount of initial capital set in accordance with Article 17 of the Law.

Art.

5. Elements defined as such in Part Two of Regulation No 575/2013 and calculated according to the methods provided for in the said Regulation are considered eligible and recognizable own funds elements. Articles 5 and 34 of the Regulation of 4 March 2014 are applicable.

Art.

6. Tier 1 own funds shall consist of at least 75% Common Equity Tier 1 own funds as referred to in Article 50 of Regulation No 575/2013. Tier 2 own funds shall not exceed one third of Tier 1 own funds.

Art.

7. Without prejudice to the provisions of Articles 8 to 10 of this regulation, the Bank assesses the solvency of the payment institution, taking into account all its activities, including hybrid activities as referred to in Article 44 of the Law.

Art.

8. If a payment institution carries out, directly or indirectly, activities other than those mentioned in Annex I.A of the Law, the Bank is authorized to determine the measures to be taken by that institution to avoid the multiple use of eligible elements for the calculation of own funds. [ 1 More specifically, concerning the activity of granting credits linked to payment services meeting the conditions of Article 44, § 3 of the Law, the Bank ensures, in accordance with Article 44, § 3, 4° of the Law, that the payment institution allocates an amount of own funds at least equivalent to 8% of the risk-weighted volume calculated according to the standard method in accordance with Part Three, Title II, Chapter 2 of Regulation No 575/2013.] 1 . [ 1 Where the institution chooses, with the agreement of the Bank, not to calculate the risk-weighted volume of credit risk based on the standard method, the weighting applied to the exposure value as defined in Part Three, Title II, Chapter 2 of Regulation No 575/2013 is 100%.] 1 . [ 1 Regarding the activity of granting credits not meeting the conditions of Article 44, § 3 of the Law, the Bank bases its assessment of solvency on the provisions of Part Three, Title II, Chapter 2 of Regulation No 575/2013.] 13 .

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( 1 )<AR 2026-06-05/16 , art. 1, 002; In force: 17-06-2026>

Section 3.

• Ratios and solvency standards

Art.

9. § 1. The own funds of the payment institution must at all times be at least equal to the amount of the solvency requirements calculated according to one of the methods defined in paragraph 2. The Bank determines the method that may be applied by a payment institution after consulting with the payment institution concerned. § 2. 1° Method A The amount of the payment institution's own funds shall be at least equal to 10% of its general expenses for the previous year. The Bank may adjust this requirement in case of a significant change in the payment institution's activity compared to the previous year. Where the payment institution has not completed a full year of activity by the calculation date, the own funds requirement shall be equal to 10% of the amount of general expenses projected in its business plan, unless the Bank requires an adjustment to that plan. For the application of this method, the general expenses taken into consideration consist of: a) various goods and services; b) remuneration, social charges and pensions; c) depreciation, value adjustments and provisions for risks and charges; d) other operating expenses, with the exception of amounts that the payment institution demonstrates are directly linked to the volume of activity. 2° Method B The amount of the payment institution's own funds shall be at least equal to the sum of the following elements, multiplied by the scaling factor k determined in paragraph 3, where the payment volume (PV) represents one twelfth of the total amount of payment transactions executed by the payment institution during the previous year: a) 4.0% of the PV tranche up to EUR 5 million, plus b) 2.5% of the PV tranche between EUR 5 million and EUR 10 million, plus c) 1% of the PV tranche between EUR 10 million and EUR 100 million, plus d) 0.5% of the PV tranche between EUR 100 million and EUR 250 million, plus e) 0.25% of the PV tranche above EUR 250 million. Where the payment institution has not completed a full year of activity by the calculation date, it shall take into account in its calculation the total amount of payment transactions projected in its business plan, unless the Bank requires an adjustment to that plan. 3° Method C The amount of the payment institution's own funds shall be at least equal to the applicable indicator defined in point a), after applying the multiplication factor determined in point b), then the scaling factor k determined in paragraph 3. a) The applicable indicator is the sum of the following elements:

• interest income
• interest expenses,
• commissions and fees received, and
• other operating income. Each element is included in the sum with its sign, positive or negative. Exceptional or unusual income cannot be used to calculate the applicable indicator. Expenses related to the outsourcing of services provided by third parties may reduce the applicable indicator if they are incurred by an undertaking subject to control under the Law. The applicable indicator is calculated based on a twelve-month observation made at the end of the previous financial year. It is calculated over the previous financial year. However, own funds calculated according to Method C cannot be less than 80% of the average of the three previous financial years for the applicable indicator. Where audited figures are not available, estimates may be used. Where the payment institution has not completed a full year of activity by the calculation date, it shall take into account in its calculation the applicable indicator projected in its business plan, unless the Bank requires an adjustment to that plan. b) The multiplication factor is equal to:
• 10% of the tranche of the applicable indicator up to EUR 2.5 million,
• 8% of the tranche of the applicable indicator between EUR 2.5 million and EUR 5 million,
• 6% of the tranche of the applicable indicator between EUR 5 million and EUR 25 million,
• 3% of the tranche of the applicable indicator between EUR 25 million and EUR 50 million,
• 1.5% of the tranche of the applicable indicator above EUR 50 million. § 3. The scaling factor k to be used for applying Methods B and C is equal to:
• 0.5 when the payment institution only provides the payment service mentioned in point 6 of Annex I.A of the Law;
• 1.0 when the payment institution provides one of the payment services mentioned in points 1 to 5 of Annex I.A of the Law.

Art.

10. The Bank may, based on an assessment of the payment institution's risk management processes, loss risk databases, and internal control arrangements, require the payment institution to hold an amount of own funds up to 20% higher than the own funds requirement determined in Article 9, or authorize the payment institution to hold an amount of own funds up to 20% lower than the own funds requirement determined in Article 9.

Section 4.

• Levels of application of requirements

Art.

11. § 1. When it deems it necessary to ensure an adequate level of solvency at group level, the Bank may decide to apply the provisions of this regulation on a consolidated basis to a parent payment institution or a subsidiary payment institution of a financial holding company in a group that does not hold a credit institution, investment firm, portfolio management company, or insurance undertakings. In this case, Articles 6, paragraph 1, 7, 11, 18, 19 and 22 of Part One, Title II of Regulation No 575/2013, as well as Articles 3 and 4 of the Regulation of 4 March 2014, apply by analogy. § 2. If the conditions provided for in Article 7 of Regulation No 575/2013 are met, the Bank may exempt a payment institution forming part of the consolidation scope of a credit institution from the application of Articles 4 to 10 of this regulation.

Section 5.

• Final provisions

Art.

12. The regulation of 19 January 2010 of the Banking, Finance and Insurance Commission concerning the own funds of payment institutions is repealed.

Art. 13. This regulation enters into force on the day of the entry into force of the Royal Decree approving it.

Signatures

Brussels, April 10, 2018. The Governor, J. SMETS Seen to be annexed to Our decree of April 27, 2018, approving the regulation of April 10, 2018, of the National Bank of Belgium concerning the own funds of payment institutions. PHILIPPE By the King: The Minister of Finance, J. VAN OVERTVELDT

Preamble

The National Bank of Belgium, Having regard to Article 12bis of the Law of 22 February 1998 establishing the organic status of the National Bank of Belgium; Having regard to the Law of 11 March 2018 on the status and supervision of payment institutions and electronic money institutions, access to the activity of payment service provider, the activity of issuing electronic money and access to payment systems, in particular Article 33; Having regard to Directive (EU) 2015/2366 of the European Parliament and of the Council of 25 November 2015 on payment services in the internal market, amending Directives 2002/65/CE, 2009/110/CE and 2013/36/UE and Regulation (EU) No 1093/2010, and repealing Directive 2007/64/CE, Articles 8 and 9, Decides:

Modification Sheet

Royal Decree of 05-06-2026 published on 17-06-2026

Article modified: 8

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