Conformity Assessment of Directive 2007/64/EC LUXEMBOURG

Transcription

1 Conformity Assessment of Directive 2007/64/EC LUXEMBOURG Final Report August Tipik Communication Agency S.A. Avenue de Tervueren 270 B-1150 Brussels Tel Fax TVA BE RCB Fortis Tipik is a Sword Group Company Eco-active business Charter signatory

2 The conformity assessment of Directive 2007/64/EC of the European Parliament and of the Council of 13 November 2007 on payment services in the internal market amending Directives 97/7/EC, 2002/65/EC, 2005/60/EC and 2006/48/EC and repealing Directive 97/5/EC has been performed under Framework Service Contract No on the Provision of services in connection with the codification of Community law and with the assessment of the conformity of the laws of Member States with Community law. The conformity assessment of Directive 2007/64/EC concerns at this stage 26 Member States as Poland has not been assessed yet in view of its late implementation of The national implementing measures notified by the Member States to the European Commission as a result of the Directive transposition process basically represent the scope of and form the background for the assessment. Reports on each Member State were drafted as a result of the assessment performed and they aim to present the main conclusions and observations on the Directive provisions. The first part of these assessment reports present the notified national implementing measures and additional legislation assessed. The second part provides a general conclusion on the conformity assessment and introduces the work performed as well as presenting cases that raise concerns of conformity according to the method used for assessment. The third and final part of the report covers the core of the assessment report. It takes the form of a concordance table, whereby the national provisions implementing the Directive provisions are listed and assessed. In addition, a general report also aims to provide a comprehensive overview of all assessments. The views expressed in the assessment reports and the general report are those of the authors alone. Publication of this report on the Commission's web-site does not mean that the Commission endorses the views expressed and the assessments carried out. The Commission does not guarantee the accuracy of the data included in the reports, nor does it accept responsibility for any use made thereof. Reproduction is authorised provided the source - Tipik Communication Agency SA - is acknowledged.

3 Conformity Assessment of Directive 2007/64/EC LUXEMBOURG GENERAL COMMENTS AND OBSERVATIONS List of the national Implementing Measures (notified to the European Commission) SUMMARY General observations and Comments Law of 10 November 2009 on payments services, the activity of electronic money institution and settlement finality in payment and securities systems (Official Journal, A, No 215, pp ) (Loi du 10 novembre 2009 relative aux services de paiement, à l activité d'établissement de monnaie électronique et au caractère définitif du règlement dans les systèmes de paiement et les systèmes de règlement des opérations sur titres) (Mémorial, A, No 215, pp ) Hereinafter referred to as: Correlation table The Law of November 2009 on payments services, the activity of electronic money institution and settlement finality in payment and securities systems, also referred to as the Law on payment services, has been notified by Luxembourg in the course of the implementation process of Directive 2007/64/EC. is a comprehensive act and covers three areas: - payments services - the activity of electronic money institution - the settlement finality in payment and securities systems. has six Titles: - Title I on definitions and scope - Title II on payment service providers - Title III on the transparency of conditions and information requirements for payment services - Title IV on the rights and obligations relating to the provision and use of payment services - Title V on the settlement finality in payment and securities systems. - Title VI on transitional, amending, repealing and final provisions Titles I to IV of this Law lay down the rules on payment services and implement as such the provisions of Directive 2007/64/EC. However, Chapter 2 of Title II deals with electronic money institutions and does not apply to payment services. has entered into force on 1 November 2009 (Article 127 of the Act). It is published in the Official Journal ( Mémorial ) on 11 November Even if it is not a legal act as such, a correlation table on the implementation of Directive 2007/64/EC was also notified. 2

4 CONCLUSIONS In the given Report the conformity assessment of the national implementing measures (NIMs) of Luxembourg with the provisions of Directive 2007/64/EC is analysed. The conformity assessment of Title V of Directive 2007/64/EC (Article 84-85) and of Title VI (Article 85, 87, 89, 90, 91, 92, 93, 94, 95 and 96) is not present in the given Report. Therefore, the conclusions and observations made in this Report do not refer to the above mentioned Articles of 1. The legal framework for payment services in Luxembourg The legal framework on payment services in Luxembourg consists of. This Law implements all provisions and requirements laid down in Directive 2007/64/EC of the European Parliament and of the Council of 13 November 2007 on payment services in the internal market amending Directives 97/7/EC, 2002/65/EC, 2005/60/EC and 2006/48/EC and repealing Directive 97/5/EC (hereinafter referred to as Directive 2007/64/EC or the Directive ). follows a streamlined approach and the structure of this Law does not necessarily correspond to that of However, it is close to the Directive one and Titles III and IV of both and the Directive correspond with each other. Therefore, references to these Titles - Title III on transparency of conditions and information requirements for payment services and Title IV on rights and obligations in relation to the provision and use of payment services - in the Directive provisions and in their implementing provisions of Law 2009 correspond with each other. In general, the Law almost literally transposes The wording is thus close, if not similar to that of The spirit, if not the letter, of the Directive is also reproduced. Differences often reflect the legal terminology in Luxembourg. which is referred to in the Luxembourg legislation as the Law on payment services (Article 128 of ) sets out a whole regime for payment services. The regime aims to implement the Directive and the scope of the Directive such as that laid down in Articles 2 and 3 is properly transposed into the Luxembourg legislation. Nevertheless, the Member States of the European Economic Area ( EEA ) are assimilated as the Member States of the European Union (EU) and the Luxembourg legislation thus includes EEA Member States within the meaning of Member States. Unless stated otherwise, this scope is without prejudice to the limits set in the EEA agreement and rules and in accordance with the Directive, which is of EEA relevance. The legislation applies to payment institutions such as referred to in Article 1 of the Directive and payment services are made in euros or in the currencies of those Member States that are not in the euro area; the Luxembourg legislation also clarifies what institution is to be regarded as a post office giro in the Member State, namely the Post and Telecommunications Company. On payment service providers, the Luxembourg legislation, although close to the Directive, introduces additional requirements as well. The Luxembourg legislation reproduces the general requirements according to which a payment institution may operate from the authorisation to the registration, including the requirements for initial capital, own funds, accounting and audits as well as payment institutions activities. On the granting of the authorisation, the Luxembourg legislation is more explicit than the Directive and also subjects payment institutions from third countries to the authorisation procedure in which the Luxembourg payment institutions are subject to. However, in addition to the three month term to address an application for authorisation, Luxembourg also provides for a twelve month term which is set as a limit by which a decision shall be taken; silence is regarded as a refusal. For these two reasons, the Luxembourg legislation has been considered as partially conform; the twelve month term may appear too long to take such a decision in comparison with the main rule of three months and the silence leading to refusal seems too restrictive. The Luxembourg legislation also provides for further details on the length of the authorisation which is unlimited as well as on the meaning of good repute and professionalism which is a requirement for the application for authorisation according to Article 5 of Luxembourg follows the Directive regarding the withdrawal of authorisation even if the legislation strictly applies the six month period of cessation of activities, whilst the Directive refers to a period of at least 3

5 six months. The Luxembourg legislation goes further regarding the communication of changes which relates to the maintenance of authorisation such as that provided for in Article 14 of the Directive. The Luxembourg legislation adds that payment institutions shall also communicate changes on acquisitions and disposals of qualifying holdings, which are not specified in the Directive and which may affect the content of the application on the basis of which authorisation was granted. However, the extent to which the Luxembourg implementing provision properly implements the Directive provision is questioned and the general rule on the communication of changes that may affect information on the basis of which the authorisation was granted is unclear with reference to the information set out in Article 5 of The conclusion leading to partial conformity of the Luxembourg legislation thus stems from a strict interpretation based on the fact that such information is essential. The Luxembourg legislation follows the requirements for own funds. As to the rule on the limit of the own funds amount set in Article 7(1) of the Directive, the Luxembourg legislation also stipulates that payment institutions may be allowed to have an amount of own funds below the limit provided that the Financial Sector Supervisory Commission ( the Commission ) so allows according to the circumstances and for a limited period of time. Luxembourg chose to ban the multiple use of elements eligible for own funds and to allow the Commission to determine the extent of the application of Article 8 of the Directive to payment institutions that are subsidiaries to credit institutions in Luxembourg. The Luxembourg legislation also goes further on the methods regarding own funds calculation and funds safeguarding. In both cases, the legislation lays down that payment institutions may change the methods provided that they receive an agreement from the Commission beforehand. The legislation also provides for further modalities to implement the two above mentioned methods. The limitation of safeguarding requirements laid down in Article 9(4) of the Directive is subject to the prior consent of the Commission. For the use of agents, branches or entities to which activities are outsourced, Luxembourg deals with them in separate provisions, whilst the Directive deals with them in a single provision. The Luxembourg legislation is also more specific on certain requirements regarding the functioning of payment institutions such as insolvency proceedings, management control, voluntary liquidation and bankruptcy. Additional requirements or specifications from a procedural point of view are explained throughout the report. However, the majority of them have been regarded as conformed as far as they aim to clarify the implementation of the legislation. In general, rules laid down in Titles III and IV are mainly complied with in a literal or almost literal manner, especially regarding the information duties. Luxembourg has chosen to apply the waiver referred to in Article 26 of the Directive provision. The provision is literally transposed even if the introductory wording of the Luxembourg implementing provision appears more stringent. However, the implementation of Article 26(5) of the Directive is considered partially conform due to a wrong cross-reference in the Luxembourg provision. The Luxembourg legislation provides for more detailed provisions on competent authorities as far as the Directive gives a certain leeway in this regard, especially concerning Articles 20 and 21. The Luxembourg competent authorities are mainly the Commission, which supervises payment institutions and the Minister responsible for the Commission who grants authorisation. The Competition Council, the Competition Inspectorate and the Central Bank of Luxembourg are also competent for matters relating to competition. All these authorities have a duty to cooperate with each other as well as with foreign authorities in accordance with The Luxembourg legislation also lays down rules on the professional obligations relating to the fight against money laundering and terrorist financing as well as professional secrecy. The Luxembourg provisions on complaints and penalties are also more detailed. However, the legislation has been regarded as partially conform in respect of Article 80(1) of the Directive as far as the scope of the complaints appears more restrictive than the Directive and concerns Titles III and IV. The Luxembourg provisions provide for fines and penalties. Even though it is not explicit on the effective, proportionate and dissuasive character of such penalties in accordance with the Directive provision, it is presumed as far as the spirit of is to ensure that rules on payment services are fulfilled. The Commission may take any measures to that end. They may be dealt with through practice as well. Nevertheless, there is no single provision on the right to apply to courts against decisions of the competent authorities. Some provisions of provide for such a right in specific cases. General principles of law on authorities and institutions of an administrative nature as well as legislation relating to these authorities and institutions have to be referred to as well. also provides for additional requirements regarding remedies and legal proceedings. A correlation table was provided covering all implementing provisions of the Directive provisions. The English translation of the implementing provisions was undertaken by the assessor. 4

6 2. Main conclusion: cases of Non-Conformity/Partial Conformity Explanatory note on the assessment Conformity applies to cases whereby the national provisions follow all requirements of the corresponding Directive provision. Some requirements of the Directive provision may not be explicitly transposed. National provisions can however be considered as conform as far as the silence does not affect the proper implementation of all requirements and that the missing ones can be inferred. Partial conformity applies to cases whereby the national provisions do not follow all the requirements of the Directive provision, or are silent about requirements which are considered minor but necessary. In cases of partial conformity, the interpretation of the national provision does not hamper the proper implementation of the Directive provision as a whole, and, missing requirements cannot be inferred. Non conformity applies to cases whereby the Directive provision is not transposed or the national provisions do not follow either, all requirements of the Directive provision, or, the main ones. In cases of non conformity, the interpretation of the national provisions hamper the proper implementation of the Directive provision as a whole, and missing requirements cannot be inferred either. Also considered are additional requirements and exemptions which hamper the proper implementation of the Directive provision. The cases where there are no headings relate to options laid down by the Directive provision that Member States do not seem to choose to apply, or, to obligations resting upon the European Commission Scope As mentioned above, the Luxembourg legislation not only covers payment services but also electronic money institutions and payment systems. follows the same scope as However, it provides for definitions of Member State and third country. As referred to above and in the report regarding the implementation of Article 2 in particular, the definition of Member State is extensive as EEA Member States are assimilated as EU Member States. The Directive covers the EU. However, it is also of EEA relevance. In addition, the definition in specifies that EEA Member States are assimilated as EU Member States within the limits of the EEA agreement and subsequent acts. Therefore, the Luxembourg legislation covers EEA Member States as far as they are bound by EU legislation in accordance with EEA arrangements. also includes provisions on payment institutions established in third countries that intend to provide payment services in Luxembourg. It is thus more explicit on these payment institutions than the Directive, which refers in general to payment institutions that are authorised to provide payment services throughout the Community. It applies to payment institutions from third countries that are subject to the same conditions as payment institutions established in Luxembourg. In this regard, they have to comply with the same process of authorisation as payment institutions established in Luxembourg to be able to provide payment services in Luxembourg. In addition, the Luxembourg implementing provision follows the same wording as Article 2(2) of the Directive according to which payment services are made in euros or in the currencies of those Member States that are not in the euro area. Luxembourg does not implement the option laid down in article 2(3) of Finally, literally transposes Article 3 of the Directive, which is an exclusionary clause on the scope of the legislation on payment services Terminology In many provisions, a literal or almost literal approach can be found. As mentioned above, a few terms have been adapted and reflect Luxembourg legal wording and/or system. These are explained through the assessment report. 5

7 2.4. Provisions of Directive 2007/64/EC The implementation by Luxembourg in general conforms to The transposition is mainly literal as mentioned above. The Luxembourg legislation also introduces additional requirements and specifications. Four cases where Luxembourg legislation does not satisfy the Directive requirements were identified. The Luxembourg legislation tends to follow a streamlined approach compared to Therefore, Article 1(1) and 4(9) of the Directive are implemented by a single provision. The same can be said for the reference to the Annex done in the Directive provision. The Annex in literally transposes the Annex of Therefore, when the Directive provisions refer to the Annex as a whole, the Luxembourg legislation does not duplicate such a reference. This results from the definition on payment services which refers to the Annex. As a consequence, any reference to payment services in encompasses the Annex. The Luxembourg legislation also reflects the two dimensions as home and host Member State. Provisions such as those relating to the Commission s powers and responsibilities set out cases where Luxembourg is the home Member State or the host Member State. The same approach is also reflected in provisions relating to Luxembourg payment institutions, including their branches and agents, as well as entities to which activities are outsourced as well as to foreign payment institutions, including their branches and agents. In this regard, Luxembourg deals with the use of agents, branches or entities to which activities are outsourced in separate provisions, whilst the Directive deals with them in a single provision. With reference to Section 1, the majority of the provisions implementing the Directive do not raise any specific issues. The provisions of in general follow the structure of the Directive provisions and the literal or almost literal transposition does not thus raise any particular issues as to their enforcement. However, there are additional requirements or specifications that ensure a comprehensive approach with the view to enforcing the legislation. Some are implied by the nature of the Directive provisions such as those on the competent authorities powers, penalties and sanctions. Other additional requirements and specifications mainly fill the gaps that the Directive does not address and they are not therefore regarded as a burden for the implementation of the Directive requirements. To be more specific than the presentation provided on the legal framework for payment services in Luxembourg in Section 1, the main additional requirements and specifications are as follows: - Regarding definitions, provides for additional definitions such as Member State and third country. It also includes definitions of parent undertaking, subsidiary as well as of holding and qualifying holding. These meanings seem to refer to those mentioned in Directive 2006/48/EC. In addition, the definition of qualifying holding in covers the definition laid down in Article 4(11) of Directive 2006/48/EC. It also goes further and cross-refers to the provisions on notification set out in Law of 11 January 2008 on transparency requirements for securities issuers. The Luxembourg legislation is thus more stringent on transparency. On the contrary, Luxembourg does not implement the definition of micro-enterprise since it did not choose to apply the options provided for in Article 30(2) and 51(3) of the Directive. - Regarding payment institutions own funds, requires the same limit as laid down in Article 7(1) of the Directive, which is set out as a rule. However, it also takes into account cases where the amount of payment institutions own funds may fall below the limit. In such an event, payment institutions may be allowed to have an amount of own funds below the limit. The Commission allows for such a situation if the circumstances so justify, for a limited period of time provided that payment institutions restore the situation or cease their activities. Such an exemption is granted and determined on a case-by-case basis. Hence, this provision also specify the implementation of the option provided for in Article 8(3) of the Directive and applied by Luxembourg regarding the possibility to allow payment institutions to have an amount of own funds either higher or lower than the amount resulting from the chosen calculation method on the basis of a 20 % ratio in the case the amount of own funds falls below the limit. - Regarding payment institutions own funds, payment institutions may change the methods of calculation and of safeguarding, with reference to Articles 8 and 9 of the Directive, which is subject to the Commission s approval. is also more explicit on funds insulation such as that provided for in Article 9(1)(b) and stipulates that they do not belong to the assets of payment institutions and cannot be used as securities or be seized in addition to creditors claims, especially in the case of insolvency such as that provided for in the Directive provision. - Regarding the granting of authorisations provided for in Article 10 of the Directive, also specifies the procedure according to which the application for authorisation shall be in written format. The authorisation is also granted for an unlimited period with reference to Article 10(2) of 6

8 also adds the mechanism for the computer system of payment institutions as part of payment institutions robust governance arrangements for the payment services business. Finally, requires more information for payment institutions to provide payment services under the freedom to provide services or under the freedom of establishment such as that laid down in Article 10(9) of the Directive as well as with reference to Article 25(1) of - Regarding the registration laid down in Article 13 of the Directive, specifies the recording of documents such as authorisation granting and withdrawal of such. - Regarding auditing by auditors provided for in Article 15(2) of the Directive, is explicit on the appointment of registered auditors by payment institutions. In addition, related to the Commission s supervision, auditors may audit other aspects relating to payment institutions than those prescribed by law if the Commission so requires. Where cross-references are related to the provisions contained in the legislation on payment services as such, in general refers to the Directive provisions equivalent. However, where cross-references are related to provisions in other legislation, follows various approaches. In this regard, the Directives referred to in the Directive provisions are implemented by means of an insertion of the text of the Directive referred to as such (e.g. implementing provisions of Article 4(30) and Article 6, introductory wording), by means of a reference to the Directives concerned (e.g. implementing provisions of Article 1(1)(a), (b) and (d) and Article 4(4)) or by means of a reference to the corresponding implementing legislation (e.g. implementing provisions of Articles 5(f) and 16(4), Article 17(1)(b)). Regarding the options set out in the Directive with reference to Article 86(2) of the Directive and the notification by Luxembourg of those chosen and those not chosen, Luxembourg decided to apply the following options: Article 7(3), Article 8(3), Article 9(2), second sentence, Article 9(4), Article 22(3), Article 26(1) and (4), Article 52(3), Article 88(3) and (4). For Article 34(2) and 53(2), Luxembourg chose the options of doubling the amount for national payment transactions and of setting the amount for prepaid instruments to EUR 500. Luxembourg chose not to apply the following options: Article 2(3), Article 9(3), Article 30(2), Article 33, Article 45(6), Article 47(3), Article 48(3), Article 51(2) and (3), Article 53(3), second sentence, Article 61(3) and Article 72. In addition, the provision that raises issues of partial conformity in our view are those that implement: - Article 11 of the Directive on the communication of the decision of granting authorisation. sets a twelve months term in addition to the three months term provided for in This term appears as a limit by which a decision regarding the application for authorisation should be taken. However, this is considered long with respect to the three months term. It also provides for cases of silence. Should there be no decision within the time limit of twelve months, this should be a refusal which is regarded as restrictive. - Article 14 of the Directive on maintenance of authorisation. The extent to which the Luxembourg legislation fully addresses communication of changes that may affect information such as that laid down in Article 5 of the Directive on the basis of which the authorisation was granted is unclear as to whether it is comprehensive enough. - Article 26(5) of the Directive on the waiver. does not cross-refer to the correct implementing provision of Article 26(4) while cross-referring to Article 48(4). Article 48(2) would have been the accurate provision to cross-refer to. The other paragraphs cross-referred to in the Luxembourg provision are the equivalent of the Directive provision ones; - Article 80(1) of the Directive on complaints. has a narrower scope than the Directive provision. While the Directive provision lays down that complaints may be based on breaches of the provisions of the Directive, the Luxembourg implementing provision limits the scope of complaints to Title III on the transparency of conditions and information requirements for payment services and Title IV on the rights and obligations relating to the provision and use of payment services of the Act. In addition, the Luxembourg implementing provision also excludes from the scope of the complaints central banks when they are not acting in their capacity as monetary authorities or other public authorities and Member States and their regional or local authorities when they are not acting in their capacity as public authorities. - Article 86(1) of the Directive on full harmonisation in relation to Article 11 of Extra elements and requirements do not appear to create a burden to the proper implementation of the Directive and are regarded as necessary elements to ensure full effectiveness instead. 7

9 3. List of the Acronyms and Abbreviations used in the Report - : Article - Arts.: Articles - EEA : European Economic Area - EU: European Union - Para.: paragraph - Subpara: subparagraph 8

10 Article No. EN Act, Article No. EN Conformity Assessment 1(1), intr. wording TITLE I SUBJECT MATTER, SCOPE AND DEFINITIONS Article 1 Subject matter 1. This Directive lays down the rules in accordance with which Member States shall distinguish the following six categories of payment service provider: 1(37) 1(37) (37) payment service provider means the following bodies or persons: While the correlation table provided by Luxembourg mentions that Article 1 of the Directive is not transposed, Luxembourg has simply streamlined the implementation of both Articles 1(1) and 4(9) of Article 4(9) which defines payment service providers cross-refers to Article 1(1) and in turn the six categories listed in this Article. Therefore, Article 1(37) of, referred to as the implementing provision of Article 4(9) of the Directive, implements Article 1(1) of the Directive as well. It provides for the six categories of payment service providers such as provided for in Article 1(1) of The Luxembourg legislation as shown below literally implements the provisions of Article 1 of the Directive and ensures that the scope of the Directive is covered under Luxembourg law. 1(1)(a) (a) credit institutions within the meaning of Article 4(1)(a) of Directive 2006/48/EC; 1(37)(i) 1(37)(i) (i) credit institutions within the meaning of Article 4(1)(a) of Directive 2006/48/EC; Article 1(37)(i) of literally transposes Article 1(1)(a) of The credit institutions concerned are those defined under Article 4(1)(a) of Directive 2006/48/EC, i.e. undertakings receiving deposits or other repayable funds from the public and granting 9

11 credits for their own accounts. In this regard, the Luxembourg provision also cross-refers to Article 4(1)(a) of Directive 2006/48/EC in a way similar to that of the Directive provision and thus covers a scope similar to that of 1(1)(b) (b) electronic money institutions within the meaning of Article 1(3)(a) of Directive 2000/46/EC; 1(37)(ii) 1(37)(ii) (ii) electronic money institutions within the meaning of Article 1(3)(a) of Directive 2000/46/EC; Article 1(37)(ii) of literally transposes Article 1(1)(b) of In this regard, the electronic money institutions concerned are those undertakings or legal persons under the meaning of Article 1(3)(a) of Directive 2000/46/EC that issues a means of payment in the form of electronic money. This Article however specifies that electronic money institutions are not credit institutions as defined in Article 1(1)(a) of Directive 2000/12/EC, which receive deposits or other repayable funds from the public and grant credits for their own accounts. The Luxembourg provision also cross-refers to Article 1(3)(a) of Directive 2000/46/EC in a way similar to that of the Directive provision and thus covers a scope similar to that of 1(1)(c) (c) post office giro institutions which are entitled under national law to provide payment services; 1(37)(iii) 1(37)(iii) (iii) post office giro institutions which are entitled under national law to provide payment services; the Post and Telecommunications Company ( Entreprise des Postes et Télécommunications ) is referred to in Luxembourg; Article 1(37)(iii) of literally transposes Article 1(1)(c) of Article 1(37)(iii) also specifies that the post office giro institutions referred to within the scope of the Directive is the Post and Telecommunications Company ( Entreprise des Postes et Télécommunications ) in Luxembourg. (d) payment institutions within the 1(37)(iv) 1(37)(iv) 10

12 1(1)(d) meaning of this Directive; (iv) payment institutions within the meaning of Directive 2007/64/EC; Article 1(37)(iv) of literally transposes Article 1(1)(d) of The Luxembourg provision simply cross-refers to Directive 2007/64/EC and thus ensures a scope similar to that of the Directive. 1(1)(e) (e) the European Central Bank and national central banks when not acting in their capacity as monetary authority or other public authorities; 1(37)(v) 1(37)(v) (v) the European Central Bank and national central banks when not acting in their capacity as monetary authority or other public authorities; Article 1(37)(v) of literally transposes Article 1(1)(e) of 1(1)(f) (f) Member States or their regional or local authorities when not acting in their capacity as public authorities. 1(37)(vi) 1(37)(vi) (vi) Member States or their regional or local authorities when not acting in their capacity as public authorities; Article 1(37)(vi) of literally transposes Article 1(1)(e) of the Directive and thus covers a scope similar to that of the Directive. 1(2) 2. This Directive also lays down rules concerning transparency of conditions and information requirements for payment services, and the respective rights and obligations of payment service users and payment service providers in relation to the provision of payment services as a regular occupation or business activity. N/A N/A Article 1(2) of the Directive relates to the overall content and structure of the Directive, which is not transposable as such. However, closely relates to the Directive in respect of payment services and covers all the Directive provisions and requirements in a literal manner for most of the cases. In this regard, Title III of lays down rules on transparency of conditions and information requirements for payment services and Title IV of this Law concerns the rights and obligations related to the provision and use of payment services. 2(1) Article 2 Scope 1. This Directive shall apply to payment 2(1) 2(1) (1) Titles I to IV, with the exception of Chapter 2 of Title II, apply to payment 11

13 services provided within the Community. However, with the exception of Article 73, Titles III and IV shall apply only where both the payer's payment service provider and the payee's payment service provider are, or the sole payment service provider in the payment transaction is, located in the Community. services provided by a payment service provider located in Luxembourg. However, with the exception of Article 99, Titles III and IV apply only where: both the payer's payment service provider and the payee's payment service provider are located in Luxembourg; the payer's payment service provider is located in Luxembourg and the payee's payment service provider is located in another Member State; the payee's payment service provider is located in Luxembourg and the payer's payment service provider is located in another Member State; the sole payment service provider in the payment transactions is located in Luxembourg. Article 2(1) of transposes Article 2(1) of the Directive. It covers the same scope as the Directive regarding payment services. as a whole has a broader scope than the Directive and lays down rules on payment services, on activities of electronic money institutions, and on finality in payment and security settlement systems. Titles I to IV of cover payment services and implement In this regard, Title I concerns definitions and scope, Title II concerns payment service providers, Title III refers to the transparency of conditions and information requirements for payment services and Title IV deals with the rights and obligations relating to the provision and use of payment services. Titles III and IV of (similar to Titles III and IV of the Directive) apply to the payer's payment service provider and the payee's payment service provider if they are both located in Luxembourg or if one of them is located in Luxembourg and the other one in another Member State. In this regard, Article 2(1) of is more specific than the Directive provision and lists the various cases related to the location of payment service providers. These cases thus take into consideration the payer s and/or payee s location; one of them is always located in Luxembourg and the other one is located in Luxembourg or in another Member State. Moreover, provides for a definition of Member State, which is not laid down in According to that definition provided for in Article 4(19) of, EEA Member States are assimilated to EU Member States. The definition also specifies that they are assimilated within the limits of the agreement and subsequent acts. In this regard, the reference to Member States in in principle also covers EEA Member States. Nevertheless, the Directive is of EEA relevance and thus applies to EEA Member States unless 12

14 provided otherwise. As mentioned, takes into account the possible limits regarding relevance to EEA Member States. Titles III and IV of apply with the exception of Article 99 of this Law, equivalent to Article 73 of the Directive on the value date and availability of funds. Article 2(1) of also exempts Chapter 2 of Title II on electronic money institutions from the scope of the rules on payment services. The Luxembourg provision thus conforms to the Directive provision. 2(2) 2. Titles III and IV shall apply to payment services made in euro or the currency of a Member State outside the euro area. 2(2) 2(2) (2) Titles III and IV shall apply to payment services made in euro or the currency of a Member State outside the euro area. Article 2(2) of literally transposes Article 2(2) of the Directive and sets out that payment services are made in euro or in the currency of the Member State that is not part of the euro area. 2(3) 3. Member States may waive the application of all or part of the provisions of this Directive to the institutions referred to in Article 2 of Directive 2006/48/EC, with the exception of those referred to in the first and second indent of that article. N/A N/A Article 2(3) of the Directive sets out an option. Owing to this option, Luxembourg did not choose to apply it. Moreover, as mentioned in the correlation table provided, Article 2 of Directive 2006/48/CE does not mention the Luxembourg institutions. Furthermore, the institutions referred to in the first and second indent of Article 2 of Directive 2006/48/EC are respectively central banks and post office giro institutions. Directive 2007/64/EC apply to them as far as they can provide payment services in accordance with Article 1 of same Directive. 3, intr. Article 3 Negative scope 3, introducto ry 3, introductory wording Titles I to IV, with the exception of 13

15 wording This Directive shall apply to none of the following: wording Chapter 2 of Title II, shall apply to none of the following: Article 3, introductory wording of transposes Article 3, introductory wording of provides for a similar negative scope as that of the Directive and follows a similar structure and wording to that of The Luxembourg provision specifies that Titles I to IV shall not apply to the specific cases listed. Titles I to IV cover payment services. In this regard, Title I of concerns definitions and scope, Title II of concerns payment service providers, Title III of refers to the transparency of conditions and information requirements for payment services and Title IV deals with the rights and obligations relating to the provision and use of payment services. They cover the scope of has a broader scope than the Directive and lays down rules on payment services, on activities of electronic money institutions, and on finality in payment and securities settlement systems. Titles I to IV cover payment services and implement Moreover, Chapter 2 of Title II on electronic money institutions does not apply to the cases listed in the Luxembourg provision nor to payment services in general. 3(a) (a) payment transactions made exclusively in cash directly from the payer to the payee, without any intermediary intervention; 3(a) 3(a) (a) payment transactions made exclusively in cash directly from the payer to the payee, without any intermediary intervention; Article 3(a) of literally transposes Article 3(a) of the Directive. 3(b) (b) payment transactions from the payer to the payee through a commercial agent authorised to negotiate or conclude the sale or purchase of goods or services 3(b) 3(b) (b) payment transactions from the payer to the payee through a commercial agent authorised to negotiate or conclude the sale Article 3(b) of literally transposes Article 3(b) of the 14

16 on behalf of the payer or the payee; or purchase of goods or services on behalf of the payer or the payee; Directive. 3(c) (c) professional physical transport of banknotes and coins, including their collection, processing and delivery; 3(c) 3(c) (c) professional physical transport of banknotes and coins, including their collection, processing and delivery; Article 3(c) of literally transposes Article 3(c) of the Directive. 3(d) (d) payment transactions consisting of the non-professional cash collection and delivery within the framework of a nonprofit or charitable activity; 3(d) 3(d) (d) payment transactions consisting of the non-professional cash collection and delivery within the framework of a nonprofit or charitable activity; Article 3(d) of literally transposes Article 3(d) of the Directive. 3(e) (e) services where cash is provided by the payee to the payer as part of a payment transaction following an explicit request by the payment service user just before the execution of the payment transaction through a payment for the purchase of goods or services; 3(e) 3(e) (e) services where cash is provided by the payee to the payer as part of a payment transaction following an explicit request by the payment service user just before the execution of the payment transaction through a payment for the purchase of goods or services; Article 3(e) of literally transposes Article 3(e) of the Directive. 3(f) (f) money exchange business, that is to say, cash-to-cash operations, where the funds are not held on a payment account; 3(f) 3(f) (f) money exchange business, that is to say, cash-to-cash operations, where the funds are not held on a payment account; Article 3(f) of literally transposes Article 3(f) of the Directive. 3(g) (g) payment transactions based on any of the following documents drawn on the payment service provider with a view to 3(g) 3(g) (g) payment transactions based on any of the following documents drawn on the Article 3(g) of literally transposes Article 3(g) of the 15

17 placing funds at the disposal of the payee: payment service provider with a view to placing funds at the disposal of the payee: Directive. 3(g)(i) (i) paper cheques in accordance with the Geneva Convention of 19 March 1931 providing a uniform law for cheques; 3(g)(i) 3(g)(i) (i) paper cheques in accordance with the Geneva Convention of 19 March 1931 providing a uniform law for cheques; Article 3(g)(i) of literally transposes Article 3(g)(i) of 3(g)(ii) (ii) paper cheques similar to those referred to in point (i) and governed by the laws of Member States which are not party to the Geneva Convention of 19 March 1931 providing a uniform law for cheques; 3(g)(ii) 3(g)(ii) (ii) paper cheques similar to those referred to in point (i) and governed by the laws of Member States which are not party to the Geneva Convention of 19 March 1931 providing a uniform law for cheques; Article 3(g)(ii) of literally transposes Article 3(g)(ii) of 3(g)(iii) (iii) paper-based drafts in accordance with the Geneva Convention of 7 June 1930 providing a uniform law for bills of exchange and promissory notes; 3(g)(iii) 3(g)(iii) (iii) paper-based drafts in accordance with the Geneva Convention of 7 June 1930 providing a uniform law for bills of exchange and promissory notes; Article 3(g)(iii) of literally transposes Article 3(g)(iii) of 3(g)(iv) (iv) paper-based drafts similar to those referred to in point (iii) and governed by the laws of Member States which are not party to the Geneva Convention of 7 June 1930 providing a uniform law for bills of exchange and promissory notes; 3(g)(iv) 3(g)(iv) (iv) paper-based drafts similar to those referred to in point (iii) and governed by the laws of Member States which are not party to the Geneva Convention of 7 June 1930 providing a uniform law for bills of exchange and promissory notes; Article 3(g)(iv) of literally transposes Article 3(g)(iv) of 3(g)(v) (v) paper-based vouchers; 3(g)(v) 3(g)(v) (v) paper-based vouchers; 16

18 Article 3(g)(v) of literally transposes Article 3(g)(v) of 3(g)(vi) (vi) paper-based traveller's cheques; or 3(g)(vi) 3(g)(vi) (vi) paper-based traveller's cheques; or Article 3(g)(vi) of literally transposes Article 3(g)(vi) of 3(g)(vii) (vii) paper-based postal money orders as defined by the Universal Postal Union; 3(g)(vii) 3(g)(vii) (vii) paper-based postal money orders as defined by the Universal Postal Union; Article 3(g)(vii) of literally transposes Article 3(g)(vii) of 3(h) (h) payment transactions carried out within a payment or securities settlement system between settlement agents, central counterparties, clearing houses and/or central banks and other participants of the system, and payment service providers, without prejudice to Article 28; 3(h) 3(h) (h) payment transactions carried out within a payment or securities settlement system between settlement agents, central counterparties, clearing houses and/or central banks and other participants of the system, and payment service providers, without prejudice to Article 57; Article 3(h) of literally transposes Article 3(h) of the Directive. Article 3(h) of cross-refers to Article 57 of this Law which implements Article 28 of the Directive as referred to in the Directive provision. 3(i) (i) payment transactions related to securities asset servicing, including dividends, income or other distributions, or redemption or sale, carried out by persons referred to in point (h) or by investment firms, credit institutions, collective investment undertakings or asset management companies providing investment services and any other entities allowed to have the custody of financial 3(i) 3(i) (i) payment transactions related to securities asset servicing, including dividends, income or other distributions, or redemption or sale, carried out by persons referred to in point (h) or by investment firms, credit institutions, collective investment undertakings or asset management companies providing investment services and any other entities Article 3(i) of literally transposes Article 3(i) of the Directive. 17

19 instruments; allowed to have the custody of financial instruments; 3(j) (j) services provided by technical service providers, which support the provision of payment services, without them entering at any time into possession of the funds to be transferred, including processing and storage of data, trust and privacy protection services, data and entity authentication, information technology (IT) and communication network provision, provision and maintenance of terminals and devices used for payment services; 3(j) 3(j) (j) services provided by technical service providers, which support the provision of payment services, without them entering at any time into possession of the funds to be transferred, including processing and storage of data, trust and privacy protection services, data and entity authentication, information technology (IT) and communication network provision, provision and maintenance of terminals and devices used for payment services; Article 3(j) of literally transposes Article 3(j) of the Directive. 3(k) (k) services based on instruments that can be used to acquire goods or services only in the premises used by the issuer or under a commercial agreement with the issuer either within a limited network of service providers or for a limited range of goods or services; 3(k) 3(k) (k) services based on instruments that can be used to acquire goods or services only in the premises used by the issuer or under a commercial agreement with the issuer either within a limited network of service providers or for a limited range of goods or services; Article 3(k) of literally transposes Article 3(k) of the Directive. 3(l) (l) payment transactions executed by means of any telecommunication, digital or IT device, where the goods or services purchased are delivered to and are to be used through a telecommunication, digital or IT device, provided that the telecommunication, digital or IT operator does not act only as an intermediary 3(l) 3(l) (l) payment transactions executed by means of any telecommunication, digital or IT device, where the goods or services purchased are delivered to and are to be used through a telecommunication, digital or IT device, provided that the Article 3(l) of literally transposes Article 3(l) of the Directive. 18

20 between the payment service user and the supplier of the goods and services; telecommunication, digital or IT operator does not act only as an intermediary between the payment service user and the supplier of the goods and services; 3(m) (m) payment transactions carried out between payment service providers, their agents or branches for their own account; 3(m) 3(m) (m) payment transactions carried out between payment service providers, their agents or branches for their own account; Article 3(m) of literally transposes Article 3(m) of the Directive. 3(n) (n) payment transactions between a parent undertaking and its subsidiary or between subsidiaries of the same parent undertaking, without any intermediary intervention by a payment service provider other than an undertaking belonging to the same group; or 3(n) 3(n) (n) payment transactions between a parent undertaking and its subsidiary or between subsidiaries of the same parent undertaking, without any intermediary intervention by a payment service provider other than an undertaking belonging to the same group; or Article 3(n) of literally transposes Article 3(n) of the Directive. 3(o) (o) services by providers to withdraw cash by means of automated teller machines acting on behalf of one or more card issuers, which are not a party to the framework contract with the customer withdrawing money from a payment account, on condition that these providers do not conduct other payment services as listed in the Annex. 3(o) 3(o) (o) services by providers to withdraw cash by means of automated teller machines acting on behalf of one or more card issuers, which are not a party to the framework contract with the customer withdrawing money from a payment account, on condition that these providers do not conduct other payment services as listed in the Annex. Article 3(o) of literally transposes Article 3(o) of the Directive. 4, pt (1) Article 4 Definitions 1(21) 1(21) Except as otherwise provided, the 19