Business scope and permission boundaries
SEMI may provide non-AIS／PIS payment services in addition to its electronic money business, such as money remittance that does not pass through its electronic money balances, but must identify that business separately. The monthly average of the relevant transactions over 12 consecutive months must not exceed EUR3,000,000, and the business must not be misrepresented as another SPI sub-licence.[2] [3]
Application value and choice of route
Select the minimum sufficient combination of permissions that lawfully supports the actual business, client scope and financial responsibilities, rather than treating the broadest permissions or fastest approval as the sole objective.
For electronic money issuers with a manageable scale of business, SEMI provides a registration route distinct from authorised EMI. Where average outstanding electronic money is below EUR500,000, there is no EMR fixed initial capital requirement; on reaching that amount, capital is generally calculated at 2%, rather than invariably requiring the EUR350,000 initial capital for an authorised EMI.[3] [5]
SEMI can not only issue stored-value balances but also execute payments using those balances and provide other payment services within the EUR3,000,000 average monthly limit for unrelated payment transactions. Applicants may expand services through registered payment agents, but agent activities must be included in monitoring and responsibility remains with SEMI.[2] [3]
Within the size thresholds, an institution can operate with a clearly defined UK regulatory status and prepare to become an authorised EMI as it grows. This status does not guarantee bank account opening, payment system access or successful approval, nor does being ‘small’ remove safeguarding, anti-money laundering or consumer protection obligations.[2] [10] [17]
Application conditions and entry requirements
Prepare a separate business plan, payment flows and transaction forecasts for this business, including all unrelated payment transactions executed by the institution and its UK agents in the monthly average test. Where payment accounts are used for unrelated payments, they should be used only for the corresponding payment transactions. Check additional consumer credit or other permission boundaries against the actual activities.[3] [19]
Shareholders, directors and key personnel
For shareholders, identify persons directly or indirectly holding at least 10% of capital or voting rights, as well as those holding less than 10% but able to exercise significant influence. Retain a look-through ownership chart, ultimate beneficial owner information and evidence of sources of funds and fitness; SEMI has no uniform requirement for British shareholders or a specified British shareholding proportion.[1] [2]
Directors, LLP management members, the head of compliance, MLRO and others actually managing the registered business should be registered and submit career histories and background information as required by FCA. Ordinary employees not directly managing the relevant activities do not all need registration on this basis. FCA assesses integrity, knowledge, experience and the ability to perform duties in practice; there is no uniform SEMI rule that 'MLRO must have three years' experience' or uniform list of professional certificates. Institutions should provide sufficient time, authority and resources rather than merely appointing nominal officeholders.[1] [2]
An SEMI operating solely through EMR registration does not automatically fall within SM&CR by virtue of that status. The SM&CR guidance from FCA excludes firms not authorised under FSMA. EMD personnel registration and suitability requirements still apply. If the same legal entity also has FSMA Part 4A permission, check the applicability of SM&CR under that permission separately. Form A, SMF approval or annual certification must not universally be listed as statutory SEMI materials.[1] [14]
A UK head office is a substantive condition, not one satisfied merely by providing a UK mailing address. FCA focuses on where central management and control are located, particularly the directors and senior managers making significant day-to-day decisions and the central compliance and management functions. Overseas shareholders may invest, but must not keep all actual management overseas while using only a UK shell company and virtual address as a regulatory contact point.[2] [3]
Capital and financial resources
There is no separate SEMI additional capital formula for that unrelated payment business; electronic money itself remains subject to the 2% capital requirements assessed against the EUR500,000 threshold. The absence of an additional capital formula does not mean working capital can be inadequate, nor does it permit lending using electronic money customer funds safeguarded by law.[2] [19]
Registered office and operational substance
SEMI must have its head office in the UK. Application materials should separately identify the head office, registered address and principal place of business, particularly explaining where board decision-making and central compliance functions actually take place. Office arrangements may be proportionate to the scale of business, but a mail-forwarding address alone cannot demonstrate substantive UK management, and a consultancy's Hong Kong or Shenzhen address cannot substitute for a UK head office.[2] [3]
This topic may be credited as “Prepared by Ren Gang Yong Sheng (Hong Kong) Limited / Tang Shangyong (Mr Tang)”, but the consultancy's address is not the applicant's address or an FCA office. The user's original page lists Floor 86, ICC, No. 1 Austin Road West, Kowloon, Hong Kong; Floor 18, Easey Commercial Building, Nos. 253–261 Hennessy Road, Wan Chai, Hong Kong; and Room 1106, Building 1, Excellence Century Centre, Futian, Shenzhen. These are user-provided brand details; actual rights of occupation or UK entity offices have not been independently verified in this regulatory review.[23]
Application document checklist
Submit legal entity formation documents, articles or LLP governance documents, specifying the head office and principal place of business. Ownership and group structure charts should trace through to ultimate controllers, while explaining whether close links and overseas structures impede FCA’s access to information and effective supervision.[1] [2]
Submit an electronic money business plan, target customers, marketing plan, funding sources and budgets for the first three financial years. Explain through a complete process when funds are received, when electronic money is issued, where funds are held and how payments and redemptions are made; where unrelated payment services are also provided, supply a separate description and forecasts for that business.[2] [3]
Submit calculation models and monitoring procedures for the EUR5,000,000 average outstanding balance test and the EUR3,000,000 monthly average test for unrelated payments. Applicants with insufficient operating history should retain business plan forecasts, exchange-rate conversion bases and growth stress scenarios; company revenue cannot replace either size metric.[2] [4]
Submit EMD information for directors, management members and those actually responsible for the business, covering identity, career history, relevant experience and disclosable criminal or regulatory history. For qualifying holders, the FCA application webpage requires a Connect form for each person or institution, whereas paragraph 3.139 of the 2026-05 approach document states that SEMI need only identify controllers in the application form and need not submit separate controller forms. Prepare the full information and confirm the current Connect requirements before submission; do not conceal this difference in official guidance as though it has been resolved.[1] [2]
Where capital requirements apply, provide eligible capital calculations and evidence that funds are in place, such as bank statements in the company's name, SH01 share allotment records and accounts. FCA allows evidence of capital to be supplied close to registration, but the requirements must be met before registration is granted; shareholders' commitments that have not actually been paid cannot directly be treated as capital in place.[2] [5]
Submit a safeguarding policy, customer fund-flow diagrams, account or insurance/guarantee arrangements and third-party due diligence records. Documents should include account acknowledgement letters, internal and external reconciliation procedures, shortfall replenishment processes, allocation of safeguarding responsibilities and a CASS 10A failure resolution information pack; applicable safeguarding audit arrangements should also be implemented.[2] [10] [11]
Submit the AML risk assessment, customer due diligence policy, beneficial owner verification process, transaction monitoring, sanctions controls and internal SAR reporting procedures. Customer records and training arrangements must match the actual risks of wallets, top-up channels, withdrawals and cross-border payments, rather than simply copying a bank template.[2] [20] [21] [22]
Submit the core IT architecture, security risk assessment, access controls for sensitive payment data, fraud statistics collection and major security incident reporting procedures. Customer complaints procedures, user terms, fees and redemption conditions, and key outsourcing contracts should be consistent, and explain how records and services will be restored following supplier disruption or exit.[2] [18]
This is provided as a reference for organising the project; it cannot replace current official application forms or case-specific requests for additional materials. Please do not send identity documents or customer records through website forms.
Application process and key steps
First assess whether the products and fund flows constitute electronic money, then calculate the two size thresholds for SEMI, excluding AIS/PIS and bank deposit-taking business. Instruments used only with the issuer itself or meeting limited network conditions may fall within an exclusion, but labels such as ‘non-profit’, ‘gift card’ or ‘interface-only’ do not themselves confer automatic exemption.[3] [4] [25]
Put in place an eligible legal entity, effective UK management, directors and a compliance team, and prepare a three-year budget, capital plan and safeguarding arrangements. The FCA pre-application support service may be used to discuss the specific business model, but pre-application discussions do not constitute endorsement of the application; bank account opening and system implementation must also be completed separately.[1] [2]
Submit the SEMI registration application, required attachments and personnel information through FCA Connect, and pay the non-refundable application fee. On the verification date, the official website listed SEMI under Category 3 with a fee of GBP1,130. This is the FCA application fee and excludes consulting fees, capital and third-party implementation costs.[1] [15]
After allocating a case officer, FCA assesses the information, checks backgrounds and requests additional documents or raises management enquiries as needed. Submitting information to the system does not mean it has been deemed complete. The firm must provide all information and evidence sufficient for a decision in accordance with FCA requirements.[2] [7]
The approval decision will specify the registration effective date and any additional business requirements. Then check the register and service scope before commencing business under the approved arrangements. Where payment services are to be provided through agents, agent registration must be completed before agents operate; distributors that merely distribute or redeem electronic money must be managed according to their actual role.[1] [2]
After commencing business, monitor balances, unrelated payment transactions, safeguarding resources and compliance incidents, and continue reporting under the applicable schedule. If anticipated growth would exceed the SEMI scope, an application for authorised EMI status may be made proactively in advance, without first demonstrating sustained excess business. Once the relevant conditions are no longer met and continued UK electronic money business is intended, the obligation to apply within 30 days under regulation 16 of EMR must be observed.[2] [9]
Approval deadlines and project timelines
Statutory decision deadlines should be distinguished from preparation time. Section 9 of EMR applies to SEMI registration through section 15: FCA must decide within three months of receiving a complete application; it may decide an incomplete application before completion, and must decide within twelve months of first receiving it. A decision does not necessarily mean approval.[7] [8]
By complete, FCA means that all information and evidence necessary for a decision has been received, not that the applicant has clicked submit. Requests for additional documents, proof of capital, bank safeguarding arrangements and personnel background issues may all affect completeness. Accordingly, claims of “obtaining a licence in 3–6 months” or “approval in 4–6 months” cannot replace the statutory distinction between complete and incomplete applications.[2] [7]
There is no uniform statutory number of preparation days or officially guaranteed UK total timeframe for establishing SEMI from scratch. This feature does not present the original page's 1–2 months of preparation or 6–9 months overall as factual commitments. Projects should have separate work plans based on UK personnel, systems, safeguarding banks, available funding and document readiness, managed separately from the decision period after acceptance by FCA.[1] [2]
Changes to shareholders, directors and permissions
SEMI is not exempt from the change-in-control regime: Schedule 3 to EMR applies the modified Part 12 regime of FSMA to EMI, and the FCA approach document expressly covers SEMI. When acquiring or increasing control across the relevant 10%, 20%, 30% or 50% thresholds, or acquiring significant influence, the proposed acquirer should notify in advance and obtain approval. Reducing or relinquishing relevant control requires advance notification, but not the same approval required for an increase in control.[2] [26]
The assessment period for a complete control notification is normally 60 working days and may be interrupted under applicable rules when supplementary information is requested; a transaction must not be completed before approval conditions are met, with a filing within five working days used as a substitute. The institution itself should also notify FCA in advance when it knows a change in control will occur. Acquisition documents need to distinguish three responsibilities: buyer approval, seller notification of a reduction in holdings, and target institution notification.[2] [26]
New appointments of directors or persons effectively managing the business should be notified before the change. EMI uses EMD Individual information rather than automatically using SM&CR Form A. Removals must be notified no later than seven working days after the event. Changes to MLRO should be reported without undue delay. Changes to names, contact addresses, significant operational arrangements and safeguarding methods should also be notified in advance or promptly under their specific rules, rather than the original page’s uniform five-day timetable or uniform ten-day address-change timetable.[1] [2]
Ongoing compliance and annual maintenance
SEMI may opt to safeguard unrelated payment customers' funds under PSR. Once it opts in, it must comply with requirements equivalent to those for authorised institutions and report its arrangements and changes. Mandatory safeguarding of funds received to purchase electronic money always applies. Even without opting into PSR safeguarding, appropriate client asset protection must be arranged for unrelated payment business.[2] [12]
Acquisition due diligence and transaction considerations
Before acquiring a SEMI company, verify its FCA registration status, effective scope of registration, additional restrictions, case correspondence and whether cancellation or exit proceedings have begun. Then check whether the Companies House entity is the same as the entity operating the brand. The transaction acquires shares in a legal entity or specific assets, not a “SEMI licence” that can be moved independently to another company. The original company's registration cannot simply serve as the operating qualification of the buyer's new company.[1] [2] [26]
Specialist due diligence must obtain details sufficient at least to reconstruct daily electronic money liabilities for the preceding six calendar months, and recalculate the EUR5,000,000 test and EUR500,000 capital boundary applicable on the first day of each month. Separate data on unrelated payments and UK agent transactions for the preceding 12 months must also be obtained to recalculate the EUR3,000,000 threshold and identify whether the seller has mistaken top-up flows for balances, omitted agents or already exceeded limits without fulfilling the obligation to convert to authorisation within 30 days.[3] [4] [5] [9]
Check actual safeguarding bank account balances, account confirmation letters, internal and external reconciliations, outstanding shortfalls, insurance payout conditions, resolution packs and REP027 history; balance screenshots cannot replace reconciliation of records to actual funds. Then check whether the SUP 3A audit exemption genuinely applies, whether the 2026 transitional test is correct, whether issued audit reports contain qualifications or breaches, and whether a change in control would trigger bank account closure or renewed approval.[10] [11] [12]
The buyer should review AML high-risk customers, frozen funds, SAR handling records and prohibitions on tipping off, complaint compensation, agent liabilities and key system outsourcing contracts, and confirm whether core management and compliance personnel will continue performing their duties in the UK after completion. Change-in-control approval, director appointment notifications, bank consent and adequate operating resources should be treated as separate completion preparations. Continued registration of the company cannot justify claims that new business can begin immediately.[2] [21] [22] [26]
View the complete process for acquiring a licensed companyBusiness segments and applicable regimes
The following are specific permissions, organisational models or statutory categories covered by this topic. They do not necessarily each constitute a separate financial licence.
Frequently asked questions
Is SEMI an authorisation or a registration?+
SEMI is registration as a small electronic money institution with FCA under EMR. The official terminology is registered rather than authorised EMI. Registration has statutory effect for conducting business, but is not equivalent to a banking licence, authorised EMI status or permission for other financial business.[1] [3]
How is the 500 × 10,000 euro ceiling calculated?+
Calculate using the average of end-of-day financial liabilities relating to electronic money over the preceding six calendar months, updated on the first day of each month and applicable for that month. This is not twelve months of transaction flows, annual issuance of 2500 × 10,000 euros or a separate limit of 500 × 10,000 euros for each customer.[3] [4]
Does SEMI require capital of 5 × 10,000, 10 × 10,000 or 35 × 10,000 euros?+
There is no uniform fixed minimum for SEMI. Where average outstanding electronic money is below EUR500,000, there is no EMR initial capital requirement; at or above that amount, capital of at least 2% of the average balance is generally required. EUR350,000 is the initial capital floor for authorised EMI and cannot be applied to all SEMI.[5] [6]
Can only payment initiation or account information services be provided?+
SEMI registration cannot be used to provide AIS or PIS; the legislation expressly excludes both. If the business conducts only AIS, RAISP registration may be considered, but this is a different regime and cannot be used to retain electronic money issuance or other payment business.[2] [3]
Can ownership be held by a foreign-owned 100%, or can an application be made using LLP?+
The conditions for SEMI impose no uniform UK local shareholding percentage. FCA expressly permits qualifying bodies corporate and gives LLP as an example. Actual shareholders and managers must still be suitable, and an offshore holding structure or mailing address cannot replace a substantive UK head office and central management.[1] [2] [3]
Do SM&CR and Form A apply to SEMI?+
A SEMI with only EMR registration does not thereby automatically fall within the SM & CR for FSMA-authorised firms. Directors and those actually managing the business must still be registered and assessed for suitability. The EMD Individual process must not be confused with SMF Form A and annual certification.[1] [2] [14]
Does a complete application guarantee approval within three months?+
Three months is the statutory decision period after FCA receives a complete application, not a guarantee of approval. An incomplete application must be decided within twelve months of initial receipt. Completeness depends on the information and evidence needed to make the decision; document preparation and account opening are not included in that three-month commitment.[2] [7] [8]
Does SEMI require annual licence renewal?+
SEMI has no one-year licence or annual reapplication mechanism as claimed on the original page. Continuing registration depends on meeting the conditions and not having registration cancelled. Annual regulatory fees and reporting obligations must be fulfilled, but payment cannot remedy failure to meet capital, safeguarding or other conditions.[2] [15]
Are funds in electronic money wallets covered by FSCS compensation?+
If SEMI itself fails, electronic money customers' funds are not covered by bank-deposit-style FSCS protection, but are dealt with through safeguarding and insolvency procedures. Proper safeguarding does not guarantee immediate repayment in full; administrators' or liquidators' costs may affect the amount and timing of repayment.[13]
Are the safeguarding rules introduced in 2026 now in force?+
The PS25/12 Supplementary Regime took effect on 2026-05-07, applies SEMI and strengthens reconciliation, information pack, monthly reporting and audit requirements. The Post-Repeal Regime proposed to replace the safeguarding provisions of EMR / PSR is a separate reform stage. The entry into force of supplementary rules alone does not justify claiming that the old legislation has been repealed in its entirety.[10] [11]
Can small institutions forgo safeguarding audits?+
The SUP 3A small-amount exemption may apply, but the test is whether relevant funds requiring safeguarding at any time exceed GBP100,000, not turnover or average electronic money balances. 2026-11 remains subject to the transitional test applicable since the rules took effect on 2026-05-07; exemption from audit does not exempt reconciliation, safeguarding or monthly reporting.[11]
Does acquiring a SEMI company require only notification of the shareholding change?+
An acquisition or increase in control crossing an applicable control threshold requires prior notification and approval from FCA, and the target institution must also give advance notice of the relevant changes. Changes of directors, bank account arrangements and business models have separate compliance requirements; they cannot all be dealt with by a single filing within five days after completion.[2] [26]
Must a breach of the limit be reported within 24 hours and sales stopped immediately?+
The original page provided no reliable basis for a uniform 24-hour deadline or immediate cessation of issuance in all circumstances. FCA should be notified promptly, with operations determined according to the specific risks and restrictions. Regulation 16 of EMR requires an application for authorisation EMI within 30 days of becoming aware that the relevant registration conditions are no longer met, provided the institution intends to continue UK electronic money business. Institutions should preferably prepare for conversion before an expected threshold breach.[2] [9]
Does registering SEMI allow direct opening of a Bank of England RTGS account?+
No. Current Bank of England guidance expressly states that small registered electronic money institutions are not eligible for RTGS accounts. Although authorised EMI may apply, they must also complete central bank, payment system and FCA assessments. SEMI cannot promote indirect access through a commercial bank as eligibility for direct central bank settlement.[17]
Are gift cards or non-profit electronic wallets automatically exempt?+
There is no automatic exemption. Whether an arrangement constitutes electronic money and qualifies for the limited network exclusion depends on third-party acceptance, merchant agreements and actual use. Non-profit entities may still issue regulated electronic money; a name or charitable purpose cannot replace statutory perimeter analysis.[4] [25]
What is the registration application fee, and can account opening or approval on the first attempt be guaranteed?+
As at the verification date, the SEMI application fee on the official FCA website is GBP1,130 under Category 3. The application fee is non-refundable, and the annual periodic fee under 2026/27 G.11 is GBP1,432. Bank account opening, consulting quotations and approval outcomes are separate matters; payment must not be presented as securing approval, nor may a consultancy guarantee approval on the first attempt.[15] [16]
Official basis and verification sources
Primarily based on FCA, PRA / Bank of England, GOV.UK and current legislation. Older third-party guides supplied by users are used to organise business material and do not override the latest official requirements.
Tang Shangyong (Mr Tang / Drew) · Business Manager
Global financial licence application, transaction and ongoing compliance services