CENTRAL BANK OF CYPRUS APPLICATION FOR THE GRANTING OF AUTHORISATION AS A PAYMENT INSTITUTION UNDER SECTION 7(1) OF THE PAYMENT SERVICES LAW OF 2009 (LAW NO. 128(I) OF 2009) Name of Applicant 1 : «..........» Purpose of this Questionnaire: This questionnaire is applicable to: (a) any company that is incorporated pursuant to the provisions of the Companies Law and maintains its head office in the Republic of Cyprus ( the Republic ), or (b) a partnership within the meaning of the General and Limited Partnerships and Business Names Law applying for authorisation as a Payment Institution, under section 7(1) of the Payment Services Law of 2009 (Law. 128(I) of 2009) (hereinafter to be referred to as the Law ). Filling in the Questionnaire 1. This Questionnaire must be duly completed and be signed by two authorized Directors of the Applicant (original signatures are required). 2. The space provided after each question in the questionnaire is NOT indicative of the extent of the expected answer. 3. All questions applicable to the case of the Applicant should be duly completed, or, if they are not applicable state N/A. Do not leave any blank spaces. If the applicant is unable to submit any of the documentation requested please provide explanations in the covering letter (referring to the section number). Outstanding documentation will delay the authorization process. 1 applicant means any company that is incorporated pursuant to the provisions of the Companies Law and maintains its head office in the Republic or a partnership within the meaning of the General and Limited Partnerships and Business Names Law which wishes to obtain authorisation as a Payment Institution under section 7(1) of the Law. OCTOBER 2011
4. In the case where, the attachment of details or documents is required, add a reference to the relevant paragraph and attach them as a numbered Appendix following the numbering order set out by the Central Bank of Cyprus ( CBC ). The numbering of the Appendices must remain unchanged even when there are no details/documents to be submitted. 5. Where applicants are required to confirm a tick ( ) placed in the relevant box will be taken as confirmation. 6. Any questions that have a YES and a NO box should be ticked as appropriate. 7. Further information or clarification may be requested (having regard to the replies furnished) for the purpose of considering and evaluating an application. 8. If you provide false or misleading information or knowingly avoid disclosing significant information, the application for authorization as a Payment Institution may be rejected. 9. This Questionnaire should be submitted to: CENTRAL BANK OF CYPRUS Licensing Section P.O. Box 25529, CY 1395 Nicosia CYPRUS TELEPHONE: +357-22714300 or 22714202 FACSIMILE: +357-22378049 E-MAIL: BSRD@centralbank.gov.cy WEBSITE: www.centralbank.gov.cy We have been duly authorized by 2.., on (date). to submit, in accordance with Section 7(1) of the Law, an application to the CBC to be granted an authorisation as a payment institution. Date:. Name and position Name and position............ 2 Insert name of the applicant 2
CONTENTS 1 Details of the Applicant 2 Direct and Indirect Controllers 3 Programme of Operations 4 Structural Organisation 5 Financial Information, Initial Capital and Own Funds 6 Safeguarding Requirements 7 Directors and managers 8 Governance arrangements and internal control mechanisms 9 Anti-money laundering and terrorist financing 10 Other information regarding the applicant 11 Appendices 12 Declaration 3
SECTION 1 DETAILS OF THE APPLICANT Document Reference 3 Applicant Central Bank of Cyprus 1.1 Full name of the applicant (i.e. the registered name of the applicant at the date of submission of the application) 1.2 Legal status of the applicant (i.e. limited company incorporated under the Cyprus Companies Law or Partnership under the General and Limited Partnerships and Business Names Law) Registered number with the Registrar of Companies 1.3 Trading name under which the applicant will provide payment services as a payment institution, if different from 1.1 above 1.4 Applicant s registered office Postal address Telephone Number: Facsimile Number: E-mail address 1.5 Applicant s head office, if different from 1.4 above Postal address Telephone Number: Facsimile Number: E-mail address 1.6 Applicant s website address 3 Insert the relevant clause number of the Business Plan or the Programme of Operations or any other appendix or document in which the required information is included. 4
1.7 Legal advisors Name of responsible legal advisor: Postal Address: E-mail address: Telephone Number: Facsimile Number: 1.8 External auditors Name of responsible partner: Postal Address: E-mail address: Telephone Number: Facsimile Number: 1.9 Representative of the Applicant regarding this application with whom the CBC can communicate Full Name: Position/relation with the Applicant: Postal address E- mail Address: Telephone number Facsimile number 1.10 If the applicant is a company: 1.10.1 State date of incorporation. 1.10.2 Confirm that the following documentation is attached: (a) Certified copy of the Certificate of Incorporation (Appendix 1); (b) Certified copy of the applicant s Memorandum and Articles (Appendix 2) of Association; 1.10.3 In case of a newly established company, a draft copy of the applicant s Memorandum and Articles of Association may be submitted, for the approval of the said document by the CBC (Appendix 3). 5
1.11 If the applicant is a Partnership: 1.11.1 State the date of commencement of partnership. 1.11.2 Confirm that (a) A certified copy of the partnership agreement is attached (Appendix 4) 1. 12 Group Structure (if applicable) 1.12.1 Does the applicant belong to a group? 1.12.2 (a) If yes, confirm that a detailed group structure chart is attached up to the ultimate beneficial owners-natural persons (Appendix 5). The chart must include the name of all group entities and percentage of holding. (b) Confirm the the following information is attached based on the above group structure chart (Appendix 5): -name of all group entities -registration number -country of establishment -competent supervisory authorities -activities 1. 13 Close Links (a) Do close links 4 exist between the applicant and any natural or legal persons? If yes, confirm that full details thereof are hereby attached (Appendix 6) 4 As defined in section 2 of the Banking Law (Law 66(I) of 1997 as subsequently amended) 6
SECTION 2 DIRECT & INDIRECT CONTROLLERS Pursuant to Article 3(1)(h) of the Payment Institutions and Access to Payment Systems Directive of 2009 (hereinafter to be referred to as ( the CBC s Directive ) the application should be submitted together with the identity of persons who have, directly or indirectly, control of the applicant (hereinafter to be referred to as controllers ) within the meaning ascribed to the term control under section 2 of the Banking Law (Law 66(I) as subsequently amended) or who are partners in the applicant partnership, within the meaning of the General and Limited Partnerships and Business Names Law, as well as details on the size of their holdings and evidence of their suitability in view of the need to ensure the sound and prudent management of the payment institution. 2.1 List all direct controllers/partners in the applicant. Natural/ of Legal Shares Persons Name of direct controllers/ partners % of shares in total capital of Voting Rights % of Voting Rights in total voting rights Date Acquired 2.2 List all indirect controllers in the applicant. Natural/ Name of indirect Legal controllers Persons Name of entity through which they hold their particip ation in the applica nt of Shares in the entity through which they hold their particip ation % of shares in the entity through which they hold their participa tion of Voting Rights in the entity through which they hold their participa tion % of Voting Rights in the entity through which they hold their participa tion 7
2.3.1 Direct and Indirect Individual Controllers Where a controller is an individual (natural person), confirm that he/she has submitted the following: (a) (b) Completed personal Questionnaire; Documentation evidencing the fact that the individual is the registered holder of the shares (for example, a certified copy of the share register) 2.3.2 Direct and Indirect Company Controllers Where a controller is an incorporated entity, confirm that the company has submitted the following: (a) (b) (c) (d) (e) Description of activities; Whether or not the company is regulated and if regulated, by which authority; Most recent audited accounts if applicable. If not available, most recent management accounts should be submitted; Documentation evidencing the fact that the company is the registered holder of the shares, i.e. copy of the share register; and Credit Rating Reports, if available from a credit rating agency 2.3.3 Controller - Partnership Where a controller is a limited liability partnership ( LLP ), confirm that the partners have submitted the following: (a) (b) (c) (d) (e) (f) (g) Description of the LLP itself (including names of general and limited partners and details of respective roles); Description of activities of the LLP; Whether or not the LLP is regulated and by which authority; Most recent audited accounts if applicable. If not available, most recent management accounts; Documentation evidencing the fact that the LLP is the registered holder of shares (if this is the case); Written confirmation that the LLP is the beneficial owner of the shares; and A copy of the partnership deed and any relevant agreement between the general and limited partners. 8
SECTION 3 PROGRAMME OF OPERATIONS Pursuant to article 3(1)(a) of the CBC s Directive every application for authorisation shall be submitted together with a programme of operations, setting out in particular the payment services envisaged 3.1 General 3.1.1 State the proposed date of commencement of operations as a payment institution. 3.1.2 Confirm that the applicant s Programme of Operations is attached to this application (Appendix 10). 3.2 Proposed Payment Services 3.2.1 Indicate the payment services in respect of which the applicant proposes to provide services to clients (by ticking the applicable boxes). Payment Services as defined in the Annex of the Law ( Payment Services ) 1. Services enabling cash to be placed on a payment account as well as all the operations required for operating a payment account. 2. Services enabling cash withdrawals from a payment account as well as the operations required for operating a payment account. 3. Execution of payment transactions, including transfers of funds on a payment account with the user s payment service provider or with another payment service provider: (a) execution of direct debits, including one-off direct debits, (b) execution of payment transactions through a payment card or a similar device, (c) execution of credit transfers, including standing orders. 4. Execution of payment transactions where the funds are covered by a credit line for a payment service user: (a) execution of direct debits, including one-off direct debits, (b) execution of payment transactions through a payment card or a similar device, (c) execution of credit transfers, including standing orders. 5. Issuing and/or acquiring of payment transactions. 6. Money Remittance. 7. Execution of payment transactions where the consent of the payer to execute a payment transaction is given by means of any telecommunications, IT system or network operator, acting only as an intermediary between the payment service user and the supplier of the goods and services. ( ) 3.2.2 Apart from the provision of payment services listed in 3.2.1 indicate whether the applicant will be engaging in any of the following activities (by ticking the appropriate box or inserting n/a ): (a) The provision of operational and closely related ancillary services such as ensuring the execution of payment transactions, foreign exchange 9
services, safekeeping activities, and the storage and processing of data, (b) The operation of payment systems, (c) The provision of a currency conversion service, (d) Any other Business activities having regard to the applicable Cyprus law. 3.2.3 Confirm that a detailed description of each proposed payment service is included in the Programme of Operations (see sections 3.2.1 and 3.2.2 above) including: (a) A detailed transaction flow from payer to payee (with a clear identification of relevant staff involved including the role of agents/branches (if any)); (b) A description of its main characteristics; and (c) A description of the infrastructure (technical and otherwise) in place to support the applicant s activities as a payment institution. 3.2.4 Where the applicant proposes engaging in the provision of one or more of the payment services in 3.2.2 above confirm that the applicant will hold payment bank accounts that will be used exclusively for payment transactions. 3.2.5 Does the applicant propose carrying out transactions (Part IV of the Law sections 26 to 43) (a) As single payment transactions only; (b) Under a Framework Contract only; or (c) Both single payment transactions and transactions under a Framework contract? 3.2.6 Will transactions be limited to low value transactions pursuant to section 75 of the Law (part VIII of the Law)? If yes, confirm that full details thereof are provided in the Programme of Operations. 3.3 Granting of Credit (if applicable) 3.3.1 Will the applicant engage in the granting of credit related to Payment Services 4, 5 and 7 of the Annex of the Law? If yes, disclose in the Programme of Operations: (a) Details of the proposed credit arrangements; and (b) Details as to how the following conditions will be met on an ongoing basis: (i) The credit shall be ancillary and granted exclusively in connection with the execution of a payment transaction; (ii) When the payment service, in connection with which the credit is granted, is provided in another member state, such credit shall be repaid within a short period which shall in no case exceed twelve months ; (iii) Such credit shall not be granted from the funds received or held for 10
the purposes of executing payment transaction; and (iv) The own funds of the applicant shall at all times and to the satisfaction of the CBC be appropriate in view of the overall amount of credit granted. 3.3.2 Confirm that the applicant complies, and will comply on an ongoing basis, with the conditions listed in 3.3.1(b)(i) to (iv) in accordance with article 8 of the CBC s Directive. 3.3.3 Confirm that the applicant will not conduct the business of accepting deposits or other repayable funds within the meaning of sections 2 and 3(1) of the Banking Law or sections 2 and 41A(1) of the Cooperative Societies Law (CAP 116 of 1977). 3.4 Access to Payment Systems (if applicable) (a) Provide details of payment systems that the applicant proposes accessing as part of its business model (including details of interactions) in the Programme of Operations. 3.5 n Payment Services (if applicable) 3.5.1 Does the applicant propose to engage exclusively in payment services? If no, confirm that a detailed description of such non payment services is provided in the Programme of Operations (it being noted that the CBC may require these activities to be undertaken by a separate legal entity) including: (a) A description of their main characteristics; and (b) A description of the infrastructure (technical and otherwise) in place to support the applicant s non payment service activities. 3.6 Breakdown of Income 3.6.1 Has the applicant traded in the 12 months preceding the date of this application? If yes, clarify the nature of the activities which the applicant has been providing and provide a breakdown of income received in respect of each activity. Activity Description of Activity % of Income 11
3.6.2 In the table below, provide details of each payment service and other services that the applicant proposes to provide in its first year of operations. In the corresponding column, insert the percentage income that is likely to accrue with each service. (A separate line should be completed for each service.) Payment Services % Other 3.7 Clients Total Income 100 3.7.1 Indicate (a) How many clients the applicant anticipates providing payment services to within: 6 months 12 months 18 months (b) Anticipated volume of transactions (daily) within: 6 months 12 months 18 months (c) Anticipated value of transactions (daily) within 6 months 12 months 18 months 3.7.2 Where the applicant proposes utilising agents, confirm that the above information is also provided on an agent by agent basis in the Programme of Operations. 3.7.3 Confirm that details of the type of anticipated clients are disclosed in Programme of Operations including: (a) Jurisdiction(s) of payer and payees; and (b) Whether customers will be: consumers, corporate, micro-enterprises - or other form of customer. 12
3.7.4 Confirm that details of how the applicant intends to attract clients (e.g. advertising, personal contacts, liaison with trade bodies) are disclosed in the Programme of Operations. 13
SECTION 4 STRUCTURAL ORGANISATION Pursuant to Article 3(g) of the CBC s Directive an application for authorisation as a payment institution shall include a description of the applicant s structural organisation, including where applicable, a description of the intended outsourcing arrangements and/or use of agents and branches and a description of its participation in a national or international payment system. 4.1 Organisational Structure 4. 1.1 Confirm that a description of the applicant s structural organisation including a description of the intended: (a) Use of Branches (see section 4.2); (b) Use of Agents (see section 4.3); (c) Outsourcing arrangements (see section 4.4); and (d) Participation in a national or international payment system if applicable, is hereby attached (Appendix 11). 4.2 Establishment of branches (if applicable) 4. 2.1 Does the applicant maintain a branch (branches) or intend to establish a branch (branches) in: (a) The Republic; and/or (b) Other member states? If yes, 4. 2.2 Disclose the number of such branches in: (a) The Republic; and (b) Other member states; and 4 2.3 Confirm that an Application for the Establishment of a Branch by a Payment Institution to be provided by the CBC is completed and attached hereto (with required supporting information and documentation) (Appendix 12). 4. 3 Use of agents (if applicable) 4. 3.1 Does the applicant intend to appoint agents in: (a) The Republic; and/or (b) Other member states? If yes, 4. 3.2 Disclose the number of such agents in: (a) The Republic; and (b) Other member states; and 14
4.3.3 Confirm that an Application for Appointment of Agents by a Payment Institution to be provided by the CBC is completed and attached hereto (with required supporting information and documentation) Appendix 13). 4. 4 Outsourcing (if applicable) 4. 4.1 Will the applicant be outsourcing operational functions of payment services to another entity (group or non-group)? If yes, 4.4.2 Confirm that the following information is attached with respect to important (as defined in article 10 of the CBC s Directive) operational functions (Appendix 14): (a) Name of service provider(s); (b) The number of persons, employed by the outsourcing entity, that will provide services to the applicant; (c) The nature of the services to be provided; (d) The internal units/individuals within the applicant that will be responsible for monitoring and managing each outsourcing arrangement; (e) Details of the applicant s contingency plans and exit strategies; and (f) Description, if applicable of the internal control mechanisms that will be used by the other entity in order to comply with AML. 4.4.3 Confirm that in accordance with article 10 of the CBC s Directive any outsourcing of important operational functions shall meet the following conditions: (a) The outsourcing will not result in the delegation by senior management of its responsibility; (b) The relationship and obligations of the applicant towards its payment service users under the Law shall not be altered; (c) The conditions with which the applicant is to comply with in order to be authorised and remain so in accordance with the Law shall not be undermined; (d) ne of the other conditions (if any) subject to which the applicant s Authorisation is granted shall be undermined; (e) The outsourcing of important operational functions will not be undertaken in such way as to materially impair the quality of the applicant s internal controls and/or the ability of the CBC to monitor the applicant s compliance with all obligations laid down in the Law; and (f) A brief description of how the conditions in 4.4.3(a) to (e) will be adhered to on an ongoing basis is, hereby, attached (Appendix 14). 15
4. 5 General 4. 5.1 Confirm that the Applicant will: (a) Ensure that agents or branches acting on its behalf inform payment service users of this fact (section 19 (4) of the Law); 4. 5.2 Confirm that the applicant will remain fully liable for any acts of its employees, any agent, branch entity to which activities are outsourced in accordance with article 20 of the Law. 16
SECTION 5 FINANCIAL INFORMATION, INITIAL CAPITAL, AND OWN FUNDS Pursuant to points (b) and (c) of article 3(1) of the CBC s Directive every application for authorisation shall be submitted together with the following: -a business plan (Appendix 15) including a forecast budget calculation for the first three financial years which demonstrates that the applicant is able to employ such systems, resources and procedures to operate soundly, -evidence that the applicant holds the required initial capital as described in section 9(1) of the Law, 5.1 Initial Capital 5.1.1 Confirm: The applicant s initial capital requirement by ticking the appropriate box. (a) 20,000 (b) 50,000 (c) 125,000 5.1.2 Confirm that specific details of all the items that comprise the initial capital (and the amounts) are disclosed in the Business Plan and that the items are consistent with article 5,1 of the CBC s Directive. 5.1.3 Confirm that evidence that the applicant holds the required initial capital is hereby attached (Appendix 16). 5.1.4 Does the applicant anticipate any changes to the information in 5.1.2 at authorisation date (if authorised)? If yes, confirm that details thereof are disclosed in the Business Plan (evidence thereof will be required pre authorisation). 5.2 Financial Projections 5.2.1 Confirm that financial projections covering a period of three years are included in the Business Plan and include: (a) Projected balance sheet as at authorisation date; (b) A monthly breakdown for the first year of operation; (c) Detailed projected profit and loss accounts; (d) Detailed projected balance sheets; and (e) tes explaining each line item and how the projections were developed. 5.3 Applicants currently trading 5.3.1 Confirm that the applicant s: (a) Latest audited accounts; and 17
(b) Most recent management accounts are attached hereto (Appendix 17). 5.3.2 Provide details of the nature of any charges (including the type of charge), guarantees, indemnities or other security or commitments (including letters of comfort) given by the applicant to third parties which are in effect at the date of application or which it is envisaged will be given, in the short term (include those relating to other group undertakings). 5.3.3 Have the accounts of the applicant carried a qualified audit report in any of the last five years? If yes, give details below. 5.4 Own Funds 5.4.1 Confirm that detailed workings of the applicant s minimum own funds calculated (based on the financial projections) using each of the following Methods are disclosed in the Business Plan: (a) Method A; (b) Method B; and (c) Method C 5.4.2 State the applicant s preferred method of calculation of own funds (by ticking relevant box) and the rational for this preference: (a) Method A (b) Method B (c) Method C 18
SECTION 6 SAFEGUARDING REQUIREMENTS Pursuant to Article 3.1 (d) of the CBC s Directive, a description of the applicant s measures taken to comply with the requirements of section 10 of the Law on the safeguarding of payment service users funds shall be submitted to the CBC. 6.1 Confirm which method of safeguarding funds which are received from payment service users or through another payment service provider for the execution of payment transactions the applicant will be utilising: (a) Segregation of Funds as provided for in Article 6(2)(a) of the CBC s Directive; or (b) Cover by an insurance policy/comparable guarantee as provided in Article 6(2)(b) of the CBC s Directive. Where an insurance contract/comparable guarantee is proposed confirm that in accordance with article 6(2)(b) of the CBC s Directive : (c) All relevant funds are covered by the insurance policy/guarantee from an insurance company or a credit institution; (d) The relevant insurance company or credit institution does not belong to the same group as the payment institution itself; (e) The amount covered by the insurance policy/guarantee is that which would have been segregated in the absence of the policy or guarantee; and (f) The proceeds of the insurance policy/guarantee are payable in the event that the payment institution is unable to meet its financial obligations. 6. 2 Confirm that the following information is hereby attached: (a) The projected amount of funds that the applicant anticipates holding, receiving or paying out; (b) The procedures in order to comply with the requirement for the safeguarding of client funds under section 10 of the Law (these should be consistent with the CBC s safeguarding requirements as prescribed under article 6 of the CBC s Directive and may be attached as an Appendix 18) 19
SECTION 7 DIRECTORS AND MANAGERS Pursuant to point (i) of article 3(1) of the CBC s Directive every application for authorisation shall include: -the identity of all directors as well as of the persons responsible for the management of the payment services activities, evidence that they are of good repute and possess appropriate knowledge and experience to perform payment services in particular a copy of criminal record, a non-bankruptcy report, a description of professional and academic qualifications, of the positions of manager or director that they hold in other legal persons and of their previous employments. 7.1 Personal Questionnaires 7.1.1 Confirm that a Personal Questionnaire is completed and attached (Appendix 19) for each person listed in Section 7.1.2. 7.1.2 Complete the table below in respect of all of the directors/proposed directors as well as of the persons responsible for the management of the payment services activities of the applicant. Name Proposed Position/Area of Responsibility Country of Residence Date Appointed/ Proposed Date of Appointment 20
SECTION 8 Governance arrangements & internal control mechanisms Pursuant to point (e) of article 3(1) of the CBC s Directive every application for authorisation shall include: -description of the applicant s governance arrangements and internal control mechanisms, including administrative, risk management and accounting procedures, which demonstrates that these governance arrangements and control mechanisms are appropriate, and adequate. 8.1 Governance and Staffing Arrangements 8.1.1 Confirm that the following governance arrangements and control mechanisms and procedures, as applicable, are included in the Business Plan and that these are appropriate and adequate, in accordance with the requirements of article 3 (1) (e) of the CBC s Directive: (a) A detailed organisation chart clearly identifying reporting and communication lines within the applicant; (b) Details of the applicant s board meetings, i.e. location, frequency, quorum and attendees; (c) Details of proposed committees (if any) including proposed members, the committee s role/responsibilities and reporting lines; (d) Details of proposed functional units/departments, heads of functions (including their roles and responsibilities and reporting by these heads of function to the applicant s Board) including Compliance (see section 8.2 below); Risk Management (see section 8.3 below); Internal Audit (see section 8.4 below); Administrative and Accounting Procedures (see section 8.5 below); (e) Specific details of proposed staffing levels (i.e. numbers) including whether they will be full-time or part-time employees and their roles/responsibilities; and (f) Where part-time employees are proposed, full details of their working arrangements are provided including details of employment with other entities (if applicable); Requirements are proportionate to the operational and financial risks faced by applicants in the course of their business. 8.1.2 Disclose the following information, as applicable, in respect of the: (a) Compliance Officer, 21
(b) Financial Controller, (c) Money Laundering Compliance Officer, (d) Officer responsible for Internal Audit, and (e) Officer responsible for Credit (a) Compliance Officer Name: Location: Reporting to: Telephone Number: Facsimile Number: E-mail: (b) Financial Controller Name: Location: Reporting to: Telephone Number: Facsimile Number: E-mail: Name: (c) Money Laundering Compliance Officer Name: Location: Reporting to: Telephone Number: Facsimile Number: E-mail: (d) Officer responsible for Internal Audit Name: Location: Reporting to: Telephone Number: Facsimile Number: 22
E-mail: (e) Officer responsible for Credit (if applicable) Name: Location: Reporting to: Telephone Number: Facsimile Number: E-mail: (f) Confirm that a description of the responsibilities of each of the officers referred to at (a) to (e) is included in the Business Plan. 8.1.3 Confirm that: a description of the audit and organisational arrangements that the applicant has set up with a view to taking all reasonable steps to protect the interests of the payment users and to ensure continuity and reliability in the performance of the payment services, is provided in the Business Plan, in accordance with article 3(2) of the CBC s Directive. 8.2 Compliance Compliance Function 8.2.1 Is the applicant establishing an independent compliance function? If yes, 8.2.2 Demonstrate (in the Business Plan): (a) The compliance function has the necessary authority, resources, expertise and access to all relevant information; (b) A Compliance Officer is appointed and is responsible for the compliance function and for all compliance reporting; (c) The Compliance Officer has relevant experience; (d) The Compliance Officer s duties (i.e. a job description); (e) The relevant persons involved in the compliance function are not involved in the performance of services or activities they monitor; (f) The proposed reporting lines/functional relationships between the Compliance Officer (including the frequency and format of reporting thereof); and (g) A description of the applicant s key compliance policies and procedures have been included. 8.3 Risk Management 8.3.1 Is the applicant establishing and will it maintain a risk management function that operates independently? 23
(a) If no, confirm that full details of the policies and procedures being adopted by the applicant to satisfy the requirements of the Directive are disclosed in the Business Plan. (b) If yes, confirm that full details thereof are disclosed in the Business Plan, including details of the risk manager. 8.3.2 Confirm that a description of the material risks of the applicant and details as to the arrangements in place in relation to the identification, management, monitoring and reporting of such risks are disclosed in the Business Plan. (Such risks should include the potential financial risks of acting as a payment institution) 8.4 Internal Audit 8.4.1 Is the applicant establishing a separate independent Internal Audit function? (a) If no, confirm that details of how the firm will comply with Article 3(2) of the CBC s Directive are disclosed in the Business Plan; (b) If yes, confirm that details thereof are included in the Business Plan, including the arrangements in place to ensure the carrying out of the responsibilities of the Internal Audit function. 8.5 Administrative and Accounting procedures 8.5.1 Confirm that details of the applicant s administrative and accounting procedures are included in the Business Plan including details of the: (a) Accounting policies and procedures that the applicant will establish that will enable it, at the request of the CBC, to deliver in a timely manner to the CBC, financial reports which reflect a true and fair view of its financial position and which comply with all applicable accounting standards and rules; (b) Internal control mechanisms (including a description of the internal audit, risk management and compliance functions (as applicable); (c) Control and safeguard arrangements for information processing; (d) Policies and procedures for keeping records of all services and transactions undertaken by it and ensuring that the records are sufficient to enable the CBC to monitor compliance with the Directive and, in particular, to ascertain whether the applicant is complying with its obligations with respect to clients or potential clients; and (e) Applicant s retention of records policy. 24
SECTION 9 ANTI-MONEY LAUNDERING & TERRORIST FINANCING Pursuant to Article 3(f) of the CBC s Directive the application shall be submitted together with a description of the internal control mechanisms which the applicant has established in order to comply with the requirements of the Prevention and Suppression of Money Laundering Activities Law of 2007 and Regulation (EC) 1781/2006 of the European Parliament and of the Council of 15 vember 2006 on information on the payer accompanying transfers of funds, as it may further amended or replaced. 9.1 Confirm that: (a) The applicant has established/will establish and will implement and maintain systems and procedures adequate to comply in full with the requirements of: - the Prevention and Suppression of Money Laundering Activities Law of 2007; and - Regulation. 1781/2006 of the European Parliament and of the Council of 15 vember 2006 on information on the payer accompanying transfer of funds ( the Regulation ). (b) The applicant has established/will establish and will implement and maintain documented risk-based customer due diligence measures pursuant to the the Prevention and Suppression of Money Laundering Activities Law of 2007. The details thereof are hereby attached (Appendix 20). (c) The applicant has established/will establish and will implement and maintain documented procedures, where applicable, in relation to its reliance on agents or third parties. The details thereof are hereby attached (Appendix 20). (d) The applicant has established/will establish and will implement and maintain documented procedures in relation to: - the making of suspicious transaction reports both internally and to the Unit for Combating Money Laundering-MOKAS - the use of its systems to be in a position to respond fully and rapidly to enquiries from the Unit for Combating Money Laundering-MOKAS, or from the CBC The details thereof are hereby attached (Appendix 20). (e) The applicant has established/will establish and will implement and maintain documented procedures in relation to the retention of customer identification and transactional records pursuant to the Prevention and Suppression of Money Laundering Activities Law of 2007. The details thereof are hereby attached (Appendix 20). 25
(f) The applicant has established/will establish and will implement and maintain ongoing training of its employees in the recognition and handling of transactions and activities which may be related to money laundering or terrorist financing pursuant to the the Prevention and Suppression of Money Laundering Activities Law of 2007. The details thereof are hereby attached (Appendix 20). (g) procedures pursuant to the Prevention and Suppression of Money Laundering Activities Law of 2007 to communicate relevant AML-CTF policies and procedures where applicable to agents, branches and subsidiaries in third countries. The details thereof are hereby attached Appendix 20). 26
SECTION 10 OTHER INFORMATION REGARDING THE APPLICANT The following questions should be answered by entering a tick ( ) in the appropriate box. In any case where the response to a question is yes, full details should be given on a separate sheet of paper and referenced to the appropriate question (Appendix 21). 10.1 Is the applicant currently, or has the applicant ever been, regulated by any regulatory authority/agency (in the Republic or outside the Republic)? If yes, please provide the name of the said authority and the business name under which the services were carried out. 10.2 Has the applicant, its controllers, or any company under its control, in the last decade dealt with a refusal for the granting, the suspension, or withdrawal/revocation of an authorisation by any regulatory authority/agency responsible for financial and/or payment services in the Republic or outside the Republic? 10.3 Is the applicant a member of any professional association or trade body (in the Republic or elsewhere)? 10.4 Has the applicant, or its controllers during the last decade applied for authorisation, membership or recognition by a body described in 10.3 above and had such an application refused? 10.5 Has an application to dissolve, compulsory liquidate, classify as insolvent or confiscate its assets or place in mandatory receivership been filed against the applicant in the last decade? 10.6 Is the applicant aware of any tax compliance issues that any of its controllers/directors may have? 10.7 Is the applicant aware of any allegations of fraud, dishonestly, breach of trust, insider dealing or market manipulation in respect of any of its controllers/directors/? 10.8 Has there ever been a verdict against the applicant, its controllers, or any company under its control, or are there any charges pending against it or any company under its control, in the Republic or outside the Republic (a) For offences or violations that involve deceit or fraud or bribery or venality or forgery or tax evasion? 27
(b) For offences or violations concerning money laundering activities? (c) For offences or violations that involve the use of confidential - privileged information? (d) For offences or violations that involve the manipulation of the stock market price of a financial instrument which was subject to trading on a regulated market, or in an equivalent market of a third country? (e) For the payment of damages in relation to the provision of investment and ancillary services? (f) For any other action that is punishable by a prison sentence? 10.9 Has an administrative sanction been imposed upon the applicant in the last decade by a competent supervisory authority, in the Republic or outside the Republic? 10.10 Have the legal advisors of the applicant been replaced in the last five years 10.11 Have the bankers of the applicant been replaced in the last five years? 10.12 Have the external auditors of the applicant been replaced in the last five years? 10.13 Have the books, records or other documents of the applicant ever been requested or confiscated by a competent supervisory authority/ regulatory body in exercise of its powers, either in the Republic or outside the Republic? 10.14 Has the applicant, or its controllers in the last decade been the object of an investigation by a competent supervisory authority in the Republic or outside the Republic? 10.15 Is there anything relevant that you would like to state that could affect either positively or negatively the forming of an opinion with regard to the Applicant? 28
SECTION 11-APPENDICES Indicate the required supporting documents which accompany this form. Appendix You are required to complete and Subparagraph send to us the following documents 1. Certified copy of the Certificate of 1.10.2 (a) incorporation (if the applicant is a company) 2. Certified copy of the Applicant s 1.10.2 (b) Memorandum and Articles of Association (if the applicant is a company) 3. Draft copy of the Applicant s 1.10.3 Memorandum and Articles of Association (in the case of a newly established company) 4. A certified copy of the partnership 1.11.2 (α) agreement (if the applicant is a partnership ) 5. Detailed group structure and 1.12.2 (α) information on group entities and (b) 6. Details of close links 1.13 (a) 7. Information and documents on Direct 2.3.1 and Indirect Individual Controllers 8. Information and documents on Direct 2.3.2 and Indirect Company Controllers 9. Information and documents on 2.3.3 Controller-Partnership 10. Programme of Operations including 3.1.2 all the information specified under section 3 11. Description of the Applicant s 4.1.1 29 Submitted ( ) / t applicable (N/A) For official use only
structural organisation 12. Application for the Establishment of a Branch by a Payment Institution 13. Application for Appointment of Agents by a Payment Institution 14. Information with regard to the outsourcing of important operational functions 15. Business Plan including all the required information specified under section 5, and section 8 16. Evidence that the applicant holds the required initial 17. Applicant s (a) Latest Audited Accounts (b) Most recent Management Accounts 18. Information on Safeguarding Requirements 19. Personal Questionnaire for Directors & Managers 20. Information on Anti-Money Laundering and Terrorist Financing Measures 21. If the applicant has answered yes to any of the questions 10.1-10.15 the relevant details/documentation should be provided to support each case. 4.2.3 4.3.3 4.4.2 & 4.4.3 Section 5 5.1.3 5.3.1 (a) & (b) 6.2 (a) & (b) 7.1.2 9.1 (a)-(g) 10.1-10.15 30
Declaration SECTION 12-DECLARATION We responsibly declare, having full knowledge of the consequences of the Law, that: a) We have exercised all due diligence in ensuring that all the information stated in this application, as well as the details and documents that accompany it are correct, complete and accurate. b) We have taken all necessary measures so that the Applicant will fulfill all the requirements for the granting of authorization as a payment institution as these are described in the Payment Services Law of 2009 (Law 128(I) of 2009) and the CBC s Payment Institution and Access to Payment Systems Directive of 2009. c) We will notify the CBC, in writing, immediately where, in the period between the submission of the application and the CBC s decision, a change takes place in the information and/or in the details and documents submitted with the application. In addition, we confirm that: We understand it is an offence knowingly or recklessly to give the CBC information that is false, misleading or deceptive. We authorise the CBC to make such enquiries and to seek such further information as it thinks appropriate to verify the information given in this Questionnaire and we acknowledge and accept that the CBC may reveal information to third parties in the discharge of its duties, as these are defined in the Law. We confirm that we are authorised to sign on behalf of the Applicant....... Full name and capacity Signature...... Full name and capacity Signature Date... 31