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The Central Bank of Cyprus introduces new directives for EMIs and PSPs

21 Aug 2025
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The Central Bank of Cyprus (CBC) introduced three significant directives, effective from 2025, aimed at strengthening the regulatory framework governing Electronic Money Institutions (EMIs) and Payment Service Providers (PSPs). These directives are designed to ensure compliance with European Union (EU) standards, enhance governance, and safeguard financial stability. Below is a detailed overview of the directives:

1. Directive on Electronic Money Institutions (EMIs)

This directive, issued by the Central Bank of Cyprus (CBC) under the provisions of the Electronic Money Laws of 2012 and 2018, aligns with EU Directives 2009/110 and 2015/2366. It introduces comprehensive measures to regulate the operations of EMIs, including:

  • Capital requirements: EMIs must maintain adequate initial and own funds, calculated based on their operational scale and risk exposure. The directive specifies methods for determining capital adequacy, ensuring financial resilience.
  • Safeguarding of funds: EMIs are required to implement robust safeguarding mechanisms to protect customer funds. These include segregation of funds, investment in low-risk assets, and insurance coverage to mitigate insolvency risks.
  • Credit granting conditions: The directive outlines strict conditions under which EMIs may grant credit related to payment services, ensuring such activities do not affect financial stability.
  • Permissible services: EMIs are permitted to offer ancillary services closely linked to electronic money issuance and payment services, such as currency exchange and data processing, provided that these do not pose undue risks.
2. Directive on the suitability of board members and key personnel in Payment Service Providers (PSPs)

This directive establishes a rigorous framework for evaluating the suitability of individuals in key governance roles within PSPs. Key provisions include:

  • Competence and integrity: Board members, senior executives, and other key personnel must demonstrate the necessary knowledge, expertise, experience, and ethical standards to fulfil their responsibilities effectively.
  • Ongoing assessment: Institutions are required to conduct regular assessments of their leadership to ensure continued compliance with suitability criteria.
  • Transparency and accountability: The directive mandates clear documentation and reporting of governance practices, fostering a culture of accountability within PSPs.
3. Directive on the suitability of advisors and directors of EMIs

This directive focuses on the leadership of EMIs. It emphasises:

  • Governance structures: EMIs must establish robust governance frameworks, with clearly defined roles and responsibilities for advisors and directors.
  • Risk management oversight: Directors are tasked with ensuring effective risk management practices, particularly in areas such as fund safeguarding and compliance with anti-money laundering regulations.
  • Ethical conduct: The directive underscores the importance of ethical behaviour and decision-making at the highest levels of EMI governance.

These directives collectively aim to bolster the regulatory landscape, ensuring that EMIs and PSPs operate with enhanced transparency, accountability, and alignment with EU standards.

The Directive on Electronic Money Institutions (in Greek) can be found here.

The Directive on the Suitability of Board Members and Key Personnel in Payment Service Providers (in Greek) can be accessed here.

The Directive on the suitability of advisors and directors of EMIs (in Greek) is here.