Opinion of the European Central Bank of 14 October 2014 on financial transparency, payment services and electronic money (CON/2014/74)
Date: 2014-10-14
Institutions: European Central Bank
Subjects: Denmark, administrative formalities, banking supervision, disclosure of information, financial stability, money, national law, payment system

EN 

ECB-PUBLIC 

OPINION OF THE EUROPEAN CENTRAL BANK 

of 14 October  2014  

on financial transparency, payment services and electronic money 

(CON/2014/74) 

Introduction and legal basis 

On 2 September 2014, the European Central Bank (ECB) received a request from the Danish Financial 

Supervisory Authority (FSA) for an opinion on a draft law amending the Law on financial business, the 

Law  on  securities  trading,  the  Law  on  payment  services  and  electronic  money  and  various  other  laws 

(hereinafter the ‘draft law’). 

The ECB’s competence to deliver an opinion is based on Articles 127(4) and 282(5) of the Treaty on the 

Functioning of the European Union and the second and sixth indents of Article 2(1) of Council Decision 
98/415/EC1,  as  the  draft  law  relates  to  means  of  payment  and  rules  applicable  to  financial  institutions 

insofar as they materially influence the stability of financial institutions and markets. In accordance with 

the first sentence of Article 17.5 of the Rules of Procedure of the European Central Bank, the Governing 

Council has adopted this opinion. 

1.  

Purpose of the draft law 

The draft law introduces a number of changes to the financial legislation. Among these, the draft 

law  aims  to  increase  openness  with  regard  to  the  FSA's  assessment  of  undertakings  under 

supervision,  e.g.  all  such  undertakings  shall  have  the  obligation  to  publish  the  FSA's  inspection 
reports2.  Furthermore,  the  draft  law  introduces  changes  to  the  Law  on  payment  services  and 
electronic money in order to cut down on administrative burden3. 

1.1  Publication of the FSA's inspection reports 

The  draft  law  proposes  extending  the  scope  of  financial  undertakings’  obligation  to  publish  the 

FSA’s  assessment  of  the  undertaking  in  question,  with  the  result  that  all  types  of  financial 

undertakings  under  supervision  pursuant  to  the  Law  on  financial  business  are  covered,  i.e. the 

obligation  is  extended  to  savings  firms,  investment  advisors,  joint  data  centres,  and  carbon 

emissions traders. 

1  

2  
3  

Council Decision 98/415/EC of 29 June 1998 on the consultation of the European Central Bank by national authorities 
regarding draft legislative provisions (OJ L 189, 3.7.1998, p. 42). 
See Section 6(10), Section 7(3), Section 8(2), Section 9(2) and Section 12(1) of the draft law. 
See Section 3 of the draft law. 

 
 
 
 
                                                 
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1.2  Amendments to the Law on payment services and electronic money 

In order to ease the administrative burden for electronic money issuers, the draft law contains an 

exemption  with regard to the  issuance  of  electronic money  in  amounts  of  less than  DKK    3  000 

(approximately  400  euro)  from  the  Law  on  payment  services  and  electronic  money,  if  such 

electronic money cannot be automatically reloaded. At the same time, this electronic money must 

have a limited scope of application, e.g. it can only be used in one particular shopping centre or in 

establishments  forming  a  particular  association  of  retailers.  The  draft  law  also  removes  payment 

substitutes that are free of charge and payment substitutes in amounts of less than DKK 3 000 from 

the draft law’s scope of application if automatic reloading is not possible. 

Additionally,  the  draft  law  provides  an  option  to  payers  where  they  will  have  additional 

information on where they have used their payment instrument (credit cards, mobile payments etc.) 

in order to provide them with an overview of the payments made (i.e. diagrams). This information 

would only be made available to the payer, who will have the option of declining this option. 

2. 

General observations  

2.1  The ECB notes that the obligation to publish FSA’s inspection reports (or information included in 

the  FSA  inspection  reports)  is  proposed  to  be  extended  to  cover  all  financial  undertakings 

supervised  by  the  FSA.  While  transparency  is  an  important  aspect  in  prudential  supervision, 

publication  of  inspection  reports  may  influence  the  way  these  reports  are  written,  and  the  speed 

with which they are written, which could be detrimental to effective supervision. The ECB recalls 

that the obligation to disclose inspection reports will not apply to credit institutions supervised by 

the Single Supervisory Mechanism. In addition, it should be observed whether these reports contain 

information which, if published, could have an impact on financial stability.  

2.2  The amendments to the Law on payment services and electronic money provide for an exemption 

from  the  application  of  the  law  for  the  issuance  of  electronic  money  in  amounts  of  less  than 

 DKK 3  000,  as  well  as  payment  substitutes  that  are  free  of  charge  and  payment  substitutes  in 

amounts of less than DKK 3 000. Directive 2009/110/EC of the European Parliament and of the 
Council4  makes  a  distinction  between  services  to  which  the  directive  does  not  apply5  and  areas 

where  the  Member  States  have  the  possibility  to  waive  the  application  of  the  directive  for  legal 

4  

5  

See Article 1(4) of Directive 2009/110/EC of the European Parliament and of the Council of 16 September 2009 on the 
taking  up,  pursuit  and  prudential  supervision  of  the  business  of  electronic  money  institutions  amending  Directives 
2005/60/EC and 2006/48/EC and repealing Directive 2000/46/EC (OJ L 267, 10.10.2009, p. 7). 
For example, services based on payment instruments that can only be used to acquire goods or services on 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. See Article 3(k) 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 (OJ L 319, 5.12.2007, p. 1). 

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persons fulfilling certain requirements6. The ECB suggests that the Danish legislator should clarify 

the  exemption  or  waiver  of  the  directive  under  which  the  issuance  of  electronic  money  and  the 

payment substitutes fall. In addition, the ECB suggests that the Danish legislator should make clear 

that ‘payment substitutes’ correspond to services specified in Article 3(k) of Directive 2007/64/EC 

and  therefore  do  not  fall  within  the  scope  of  either  Directive  2007/64/EC  or  Directive 

2009/110/EC. 

2.3  Finally,  the  ECB  would  like  to  mention  the  recommendations  from  the  European  Forum  on  the 

Security  of  Retail  Payments,  SecuRe  Pay,  with  regard  to  the  proposed  additional  possibilities  to 

provide  collected  payment  information,  which  might  provide  some  guidance  in  the  area  of  user 
security7. 

This opinion will be published on the ECB’s website.  

Done at Frankfurt am Main, 14 October 2014. 

[signed] 

The President of the ECB 

Mario DRAGHI 

6  

7  

This possibility is available where: (a) the total business activities generate an average amount of outstanding electronic 
money  that  does  not  exceed  a  limit  set  by  the  Member  State  but  that  amounts  to  no  more  than  EUR  5  000  000;  and 
(b) none  of  the  natural  persons  responsible  for  the  management  or  operation  of  the  business  has  been  convicted  of 
offences  relating  to  money  laundering  or  terrorist  financing  or  other  financial  crimes.  See  Article  9(1)  of  Directive 
2009/110/EC. 
Please  see  'Final  recommendations  for  the  security  of  payment  account  access  services  following  the  consultation', 
available on the ECB’s website at www.ecb.europa.eu. 

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