Banking Business

Financial instrument

Banking Business comprises the Regulated Activities of Accepting Deposits, Dealing in Investments as Principal and Providing Credit. An Authorised Firm that has a license from the AFSA to conduct any of those activities is a Banking Business firm. An Authorised Firm is a Bank if it is authorised to conduct the Regulated Activity of Accepting Deposits and/or Opening and Operating Bank Accounts. An Authorised Firm is a Bank even if it is also authorised to conduct any other Regulated Activity or activity.

The authorisation for Accepting Deposits and/or Opening and Operating Bank Accounts qualifies an Authorised Firm as a Bank.

Types of Licenses

  • Accepting Deposits license Accepting Deposits means accepting money or funds received as a Deposit if that money or funds are:

(a) lent to other Persons; or

(b) used to finance wholly, or partly, any other activity of the Person accepting the Deposit.

To the extent that any activity constitutes Opening and Operating Bank Accounts, such a Regulated Activity is taken to be incorporated within Accepting Deposits.

  • Providing Credit License Providing Credit means providing a Credit Facility to another Person.

An Authorised Firm is a Credit Provider if it is authorised to conduct the Regulated Activity of Providing Credit and it is not a Bank.

Credit Providers may raise funds from capital markets or money markets using debt instruments of any type but must not accept Deposits.

An Authorised Firm is a Credit Provider even if it is also authorised to conduct any Regulated Activity (except Accepting Deposits). The authorisation for Providing Credit and the absence of an authorisation for Accepting Deposits qualifies an Authorised Firm as a Credit Provider.

A Credit Provider may conduct the Regulated Activity of Dealing in Investments as Principal, if it receives the necessary authorisation from the AFSA.

An Authorised Firm licensed to conduct the Regulated Activity of Providing Credit from its own funds does not fall under the category of Credit Provider. Such firms are not subject the BBR rules.

  • Advising on a Credit Facility (1) Advising on a Credit Facility means giving advice to a Person in his capacity as a borrower or a potential borrower, or as an agent for a borrower or a potential borrower, on the merits of his entering into a particular Credit Facility.

(2) In sub‐paragraph (1), “advice” includes a statement, opinion or report:

(a) where the intention is to influence a Person, in making a decision, to enter into a particular Credit Facility; or

(b) which could reasonably be regarded as being intended to have such an influence.

  • Arranging a Credit Facility (1) Arranging a Credit Facility means making arrangements for the provision of a Credit Facility by one or more Persons.

(2) A Person does not carry on the Regulated Activity of Arranging a Credit Facility if

(a) he is to be a party to the Provision of Credit Facilities in question; or

(b) he merely provides the means by which a Person providing a Credit Facility communicates with the Person to whom the Credit Facility is or is to be provided.

(3) A Person does not carry on the Regulated Activity of Arranging a Credit Facility if it:

(a) is carried on in the course of Providing Legal Services or Providing Accountancy Services, which does not otherwise consist of the carrying on of Financial Services;

(b) may reasonably be regarded as a necessary part of any other services provided in the course of Providing Legal Services or Providing Accountancy Services; and

(c) is not remunerated separately from the other services.

(a) providing currency exchange;

(b) selling or issuing payment instruments;

(c) selling or issuing stored value;

(d) Execution of payment transactions, including transfers of funds on a settlement account, including a bank account, with the user’s payment service provider or with another payment service provider:

(i) execution of direct debits, including one-off direct debits;

(ii) execution of payment transactions through a payment card or a similar device; and

(e) Execution of payment transactions where the funds are covered by a credit line for a payment service user:

(i) execution of direct debits, including one-off direct debits;

(ii) execution of payment transactions through a payment card or a similar device; and

(f) Money remittance; and

(g) Execution of payment transactions where the consent of the payer to execute a payment transaction is given by means of any telecommunication, digital or IT device and the payment is made to the telecommunication, IT system or network operator, acting only as an intermediary between the payment service user and the supplier of the goods and services.

(2) An Authorised Person does not provide Money Services, if it does so in relation to the carrying on of another Regulated Activity where providing Money Services is in connection with and a necessary part of that other Regulated Activity.

(a) Opening and operating Bank Accounts;

(b) Services enabling funds to be placed on a Bank Account as well as all the operations required for operating a bank account; and

(c) Services enabling funds withdrawals from a Bank Account as well as all the operations required for operating a Bank Account.

Operation of funds transfer system with formal and standardised arrangements and common rules for the processing, clearing and/or settlement of payment transactions.