ELM 2.5 Continuing capital requirement

A firm must, at all times, maintain own funds equal to or in excess of its own funds requirement.

A firm's own funds requirement is, at any time, 2% of the higher of the following amounts:

1. (1)

   its e-money outstandings at that time; and

2. (2)

   the average of its daily e-money outstandings amount for the six month period ending at that time.

If a firm has not been an ELMI for the whole of the period referred to in ELM 2.5.2 R (2), the firm must calculate the amount in ELM 2.5.2 R (2) from the projected amounts of its daily e-money outstandings amount for the six month period beginning on the day it is granted an e-money permission. Those projections must be the ones contained in the business plan supplied by the firm to the FSA as part of its application for the granting an e-money permission or (if the plan is amended and resubmitted to the FSA before the granting an e-money permission) the plan as so amended and resubmitted.

If, in relation to a firm:

1. (1)

   the projections referred to in ELM 2.5.3 R (or any further projections prepared under this rule) have proved to be significantly incorrect; or

2. (2)

   it is reasonably likely that those projections will prove to be significantly incorrect;

and more than one month of the six month period beginning on the date the firm is granted an e-money permission remains at the time that the circumstances in ELM 2.5.4 R (1) or ELM 2.5.4 R (2) first arise, the firm must prepare revised projections of its daily e-money outstandings amount for the rest of that period.

The revised projections in ELM 2.5.4 R must:

1. (1)

   be prepared to a high standard and be fair and reasonable;

2. (2)

   be based on reasonable and appropriate assumptions and research and (where appropriate) fact; and

3. (3)

   be completed and sent to the FSA within ten business days of the circumstances in ELM 2.5.4 R (1) or ELM 2.5.4 R (2) first arising.

If a firm produces new projections under ELM 2.5.4 R, the amount referred to in ELM 2.5.2 R (2) must be calculated from the average of its daily e-money outstandings amount for the six month period beginning on the day it is granted an e-money permission, as follows:

1. (1)

   (for the period prior to the day as of which the calculation is being made) from the firm's actual e-money outstandings; and

2. (2)

   (for the remainder of the six month period) from those new projections.