Prudential requirements for payment institutions: a European Union perspective in view of PSD3

This paper focuses the attention on a particular topic not much discuss in doctrine: the prudential requirements of payment institutions. Like all other intermediaries operating in the financial market, payment institutions are subject to strict prudential regulations concerning the request for a specific authorization. For supervisory authorities to release that authorization, payment institutions must comply with some requirements that primarily concern legal form, ownership of shares, capital and other funds. The existence of these requirements is a necessary condition for obtaining authorization, which is subject to stringent rules that concern not only the issue of said authorization but also its maintenance and possible revocation. The principal aim of this paper is to focus the attention on the rules providing important prudential requirements like ownership, own funds, the identity of directors and persons responsible for the management, internal control system, seeking to grasp differences and/or similarities with financial market regulations on other intermediaries (banks and insurance companies) considering, inter alia, the possible effect of the new proposal of PSD3.