United Kingdom

The Electronic Money Regulations 2011 (SI 2011 No. 99) were introduced to regulate the issuance and management of electronic money within the United Kingdom. They establish the framework for authorising and supervising electronic money institutions and ensure that customer funds are safeguarded, accurately recorded, and traceable. While the regulations do not explicitly reference the FATF Travel Rule, their provisions support the broader objectives of wire transfer regulation by enhancing transparency, customer identification, and transaction integrity.

Authorisation & Registration

Parts 2 and 3 of the Regulations set out the conditions for authorisation and registration of both full and small electronic money institutions. Applicants must demonstrate compliance with capital adequacy requirements, safeguarding procedures, governance standards, and internal controls. These entry conditions ensure that only fit and proper firms issue electronic money, which supports WTR principles by ensuring that fund transfers originate from regulated and accountable entities.

Customer Safeguarding & Fund Segregation

The safeguarding provisions under Part 3 require electronic money institutions to protect customer funds by segregating them from the institution’s own assets or insuring them against insolvency. These safeguards are essential for ensuring that funds transferred via electronic money channels remain secure and recoverable, directly reinforcing WTR concerns around the integrity and traceability of payment flows.

Record Keeping & Reporting

Regulation 27 obliges firms to maintain records sufficient to demonstrate compliance with the Regulations and to assist the Financial Conduct Authority (FCA) in supervisory duties. This includes transaction records, customer details, and operational data. Retention and accessibility of such information directly support wire transfer regulation by ensuring that originator and beneficiary details can be retrieved for verification and enforcement purposes.

Use of Distributors & Agents

Part 4 addresses the conditions under which electronic money institutions may use agents or distributors. All agents must be registered and subject to appropriate oversight. Institutions are responsible for ensuring agents meet regulatory standards and maintain accurate records of transactions and customer identity. This supports WTR objectives by ensuring that information collected or processed by third parties is held to the same standard as that gathered by the principal institution.

Issuance & Redemption of Electronic Money

Part 5 regulates the issuance and redeemability of electronic money, requiring firms to return the monetary value of stored electronic money upon request and under specific conditions. These provisions prevent abuse of stored value instruments for anonymity or money laundering and ensure that the origin and final use of funds are documented.

Enforcement & Supervisory Powers

Part 6 grants the FCA significant supervisory and enforcement authority, including the power to suspend authorisations, impose penalties, require restitution, and issue public censure. The FCA may also share information with other regulatory bodies domestically and internationally, which aligns with WTR’s emphasis on cross-border cooperation and data availability in relation to suspicious or incomplete transactions.

Offences & Penalties

Part 7 outlines criminal offences including the unauthorised issuance of electronic money, false claims of authorisation, and provision of misleading information to the FCA. These offences serve as a deterrent to non-compliant behaviour and underpin the enforceability of obligations similar to those mandated under wire transfer regulations.

Amendments & Cross-Referenced Legislation

Schedules to the Regulations apply and modify other legislation, including provisions from the Financial Services and Markets Act 2000, the Proceeds of Crime Act 2002, and the Money Laundering Regulations. These interlinkages ensure that the electronic money regime aligns with the UK’s wider anti-money laundering and counter-terrorist financing framework.

Conclusion: WTR Compliance Integration

The Electronic Money Regulations 2011 establish a comprehensive regime for the regulation of digital payment mechanisms that parallels the core goals of wire transfer regulation. Through requirements for customer identification, record-keeping, safeguarding of funds, and FCA supervision, the Regulations support the secure and transparent movement of electronic value. Although the FATF Travel Rule is not explicitly referenced, the operational and compliance structures mandated by the Regulations contribute directly to the traceability and legitimacy of fund transfers, thereby reinforcing the UK's financial crime prevention infrastructure.