ELM 6.7 Terms of redemption

A firm must ensure that (for each e-money scheme under which it issues e-money) the e-money scheme rules (so far as the firm is a party to the relevant contracts or can control their contents) are consistent with the rules in this chapter.

A firm must (for any e-money scheme under which the firm issues e-money) ensure that there is a contract between it and:

1. (1)

   any person to whom it issues e-money; and

2. (2)

   any other person with a redemption right against the firm.

The contract referred to in ELM 6.7.2 R (1) must be in force at the time the firm issues the e-money.

The contract referred to in ELM 6.7.2 R (2) must be in force either before the person with the redemption right referred to in ELM 6.7.2 R (2) obtains the e-money in question or as soon as reasonably possible afterwards, having regard to the laws of the jurisdiction in question and the nature of the scheme. It must however be in force no later than the time of redemption.

Any contract referred to in ELM 6.7.2 R must incorporate the duty of the firm under the rules in this chapter to redeem e-money issued by it as a term of that contract. That term must be enforceable against the firm by the person who holds the e-money. That term must include all the rights that the rules in ELM 6.3 to ELM 6.6 say that the firm must give to a person exercising a redemption right against the firm.