ELM 6.3 Duty to redeem

A firm must, if requested to do so, redeem, at par, any e-money it has issued if the request is from a person who lawfully holds the e-money and who is:

1. (1)

   the person to whom the firm issued the e-money; or

2. (2)

   any other person holding the e-money in accordance with the e-money scheme rules other than a merchant who has accepted e-money in the course of business in settlement of goods or services.1

   1

A firm must give a person who is exercising a redemption right against the firm the right to have the proceeds of redemption paid to him in the currency in which the e-money is denominated.

A firm must give a person who is exercising a redemption right against the firm in accordance with ELM 6.5.1 R:

1. (1)

   (in the case of redemption for cash) the right to receive the cash immediately following the completion of the procedures in ELM 6.3.4 R;

2. (2)

   (in the case of redemption in accordance with ELM 6.5.1 R (2)) the right to be paid as follows:

   1. (a)

      the firm must give the necessary payment instructions immediately following the completion of the procedures in ELM 6.3.4 R; and

   2. (b)

      the firm must ensure that the funds reach the holder's account within five business days of the day on which it gave the instructions in (2)(a).

1. (1)

   The procedures referred to in ELM 6.3.3 R are the carrying out of any checks that are reasonably required to prevent money laundering or fraud or to check whether the holder of the e-money is a person who is entitled to redeem it.

2. (2)

   A firm must complete any procedures referred to in (1) as soon as reasonably possible.

Nothing in ELM 6.3 requires a firm to do anything:

1. (1)

   prohibited by any of the rules in ML; or

2. (2)

   prohibited by the Money Laundering Regulations; or

3. (3)

   that would be a criminal offence under the law of any part of the United Kingdom; or

4. (4)

   (in relation to e-money) that would be a criminal offence under the law of a country other than the United Kingdom in which the firm redeems or would redeem that e-money.

A firm does not breach ELM 6.3.3 R (2) if the failure of the funds to reach the holder's account in time is caused by a failure outside the firm's control on the part of any third party that is involved in the funds transfer.