A memorandum from the Ministry of Finance published on 15 February this year contained a proposal that activities involving currency exchange, issue of electronic money and all activities involving payment services, except account information services, should be subject to a licence. The proposal was submitted to the Council on Legislation for comments on 10 October this year.
Under the proposal, registered currency exchangers, registered issuers of electronic money and registered payment service providers (except those that only provide account information services) will need to apply for a licence from the Financial Supervisory Authority to be able to continue with their activities. It is specifically noted that activities involving currency exchange through exchange of cash will only be able to be provided by payment institutions, electronic money institutions and credit institutions, as well as branches of corresponding foreign companies. As far as the provision of payment services is concerned, operators may – as an alternative to the licence requirement – be registered as representatives for Swedish or foreign payment institutions.
The proposal is put forward in the light of the fact that the Police Authority and the national coordinating function against money laundering have stated in a number of reports that currency exchangers and payment service agents play a key role in money laundering by criminal networks. In its thematic investigations of currency exchangers in 2022 and 2023, the Financial Supervisory Authority also found extensive defects in their anti-money laundering work.
At present, there are approximately 95 registered operators that may be affected by the proposed change. Of these, approximately 40 are registered payment service providers and approximately 55 are currency exchangers. The licence requirement also means that the activities will need to be carried on through a limited company or an economic association. That means, among other things, that the thresholds for starting up and carrying on such activities will be raised. This aims to counter irresponsible operators and prevent the use of the financial system for criminal purposes.
The proposal also means that registered payment service providers that provide account information services will be subject to the Anti-Money Laundering Act, which constitutes an adaptation to EU law. It is proposed that the new rules should enter into force on 1 July 2025, with a transitional period for existing registered operators, who will be permitted to continue their activities up to 31 December 2025. However, operators that submit an application for a licence to the Financial Supervisory Authority before 1 January 2026 will also be permitted to continue operating after the transitional period until the application for a licence has been finally processed.
The Government’s full proposal is available to read here.
