1. This Regulation applies to all SVF as defined in Article (1) Definition.

License required for issuing SVF

2. Issuing and operating SVF in the State requires a prior License from the Central Bank. It is prohibited to carry on the activity of issuing or operating SVF without prior License except if the issued SVF is a Single-purpose Stored Value Facility.

Exclusion of certain types of SVF

3. On application by an Issuer, the Central Bank may exempt an SVF from the licensing requirements and will do so based on the risk the SVF poses to its (potential) Customers, Customer funds and the financial system.
    
4. The types of SVF that may be exempted from the licensing requirements by the Central Bank include:
    
   1. 4.1. SVF used for certain cash reward schemes. Such SVF may be used for storing only a sum of money paid by (i) the issuer; or (ii) a person who agrees to pay a sum of money for storage in the facility under an agreement with the issuer and the sum of money stored may only be used for making payments for goods or services provided by the issuer or person under very specific terms and conditions of the facility. Examples include loyalty schemes provided by shops and supermarkets which offer cash rewards for customer loyalty;
       
   2. 4.2. SVF used for purchasing certain digital products. Such SVF may only be used as a means of making payments for goods or services that are delivered to, and are to be used through, a telecommunication, digital or technology device; the payments are executed through such a device; and the telecommunication, digital or technology operator acts as an intermediary between the Customer of the facility and the provider of the goods or services. Examples include purchase of digital contents such as ringtones, music, videos, electronic books, games and applications that can be used on smartphones, computers or other information technology devices;
       
   3. 4.3. SVF used for certain bonus point schemes. Such SVF may be used only for storing points or units (by whatever name called) that are Money’s Worth provided by (i) the issuer; or (ii) a person who agrees to provide goods or services to the Customer under an agreement with the issuer. The Customer may use the points or units for making payments for the goods or services provided by the issuer or person either by (i) using only the points or units; or (ii) using the points or units together with a sum of money (in any currency) that is stored on the facility temporarily for the sole purpose of executing the payments; and the sum of money so stored is not redeemable for cash. Examples are airline mileage programs and customer loyalty schemes that provide non-cash points to customers to reward their patronage, and whereby such points and value stored, if any, is not redeemable for cash;
       
   4. 4.4. SVF that can only be used within a limited group of goods or services providers. Such SVF may be used as a means of making payments only for goods or services provided by (i) the issuer; or (ii) a person who provides the goods or services under an agreement with the issuer; and
       
   5. 4.5. whereby (i) the aggregate amount of the Float of the facilities does not exceed half a million Dirham (500,000 AED) or its equivalent and the aggregate number of Customers is not more than 100. If a potential SVF Issuer wishes to apply for this particular exemption, the SVF is required to test out its product before making a full launch of SVF. In this regard, the relevant issuer is required to participate in the Central Bank’s FinTech Office sandboxing arrangement for a possible trial run.
       
5. The Central Bank may request any information from an exempted SVF Issuer when the Central Bank considers it necessary to determine its eligibility for exemption and continued exemption. The Central Bank may declare an SVF not exempt from the licensing requirement and require the issuer of the SVF to apply for a License.

Overseas SVF schemes

6. It is prohibited for an SVF without a prior License to publish in the State or elsewhere, an advertisement, invitation or document which is, or contains, an invitation or a solicitation to the public of the State relating (whether in whole or in part) to the issuance of SVF.

Relevant factors to be considered

7. The Central Bank will take into account the factors to determine whether an overseas SVF is issued in the State or a person publishes an advertisement, invitation or document which is, or contains, an invitation or solicitation to the State public relating to the issuance of SVF.
    
8. In determining whether an SVF scheme is presented or provided in such a manner that it appears to be issued in the State, the Central Bank will consider all relevant factors including, in particular, the following:
    
   1. 8.1. whether the location for the delivery of the facility and the provision of the subsequent customer service to facility users is in the State;
       
   2. 8.2. whether the location for and the manner to top-up the SVF is through channels in the State (e.g. banks in the State);
       
   3. 8.3. whether the promotional material is targeted, via “push” techniques, at a group or groups of people whom the issuer knows, or should reasonably know, reside in the State. “Push” techniques include spamming, broadcasting or directing information to a particular person or group of people through, for instance, e-mails, SMS messages and any social media channels;
       
   4. 8.4. whether any news group, bulletin board, chat room or similar facility associated with the site has been used to promote the SVF service in the State; and
       
   5. 8.5. in the case of services details and promotional material hosted on a site, the Central Bank will assess whether the website's existence has been included in a State search engine or the State section of a search engine; and whether the SVF advertisements, in print or online forms, are easily accessible in the State and whether the website has been advertised in the State through advertising agencies, in periodicals (e.g. newspapers, journals or electronic publications) or by broadcasting (e.g. television or radio).
       
9. In determining whether the content of the issuer’s website and the relevant promotional materials are written in a manner which gives an impression that the SVF is issued in the State, the Central Bank will take a holistic approach and consider a host of factors including but not limited to the following:
    
   1. 9.1. whether representations made in any promotional materials and advertisements regarding the location of the issue of the SVF and the usage of that facility is in the State; and
       
   2. 9.2. whether the website and its functions are designed in a manner that may imply or give the impression that the SVF is issued in the State, such as the languages used in the SVF website (e.g. the Arabic language), the use of particular domain name such as a State domain name, the currencies accepted for the services (e.g. AED), contact details in the State.
       
10. The Central Bank will consider all relevant factors including, in particular, whether reasonable precautions are in place to avoid the promotional materials being made available or accessible to persons in the State and whether the issuer has systems in place to avoid providing services to persons residing in the State.
     
11. The Central Bank may also consider matters such as whether the SVF Issuer has established a physical presence in the State; and whether it has established business relationships with banks or financial institutions in the State for payment or other banking support services in the State.
     
12. The above factors and criteria are neither exhaustive nor conclusive. The Central Bank will use a holistic approach to judge each case on its merits and take into account the particular circumstances and all relevant facts.
     

1. In accordance with Article (65) of the Central Bank Law, the provision of Stored Value Facilities is considered a Licensed Financial Activity and subject to the Central Bank’s licensing and supervision in accordance with the provisions of the Central Bank Law. In this connection, an Applicant must satisfy the licensing requirements set by the Central Bank for SVF issuance, and continue to do so on an ongoing basis as a Licensee.
    
2. The Applicant must be a company incorporated in the State, including free zones but excluding Financial Free Zones.
    
3. Applicants must meet, or demonstrate that they will meet upon License issuance, the ongoing requirements set out in Articles (7) to (14) of this Regulation applicable to Licensees, in particular:
    
   1. 3.1. The requirements regarding financial resources as set out in Article (7) of this Regulation. The Central Bank may add additional requirements regarding financial resources or increase the existing ones as a condition for License issuance, where it considers such additional requirements necessary;
       
   2. 3.2. The requirements regarding their principal business, as set out in Article (7) of this Regulation. The Application must disclose to the Central Bank any activities and secondary or ancillary businesses that the Applicant conducts or plans to conduct that may not be directly related to the issuance of SVF;
       
   3. 3.3. The requirements regarding corporate governance, general risk management and internal control, and accounting system as set out in Articles (8) to (10) of this Regulation. In particular, board of directors, the Senior Management, and the Controlling Shareholder must have been approved by the Central Bank as fit and proper in the context of the Application before the License is granted;
       
   4. 3.4. The requirements regarding risk management policies and procedures for the management and protection of the Float, as set out in Article (11) of this Regulation;
       
   5. 3.5. The requirements regarding technology and specific risk management policies and procedures for managing the risks arising from the operation of the SVF business, as set out in Article (12) of this Regulation;
       
   6. 3.6. The requirements regarding business conduct and Customer protection as set out in Article (13) of this Regulation;
       
   7. 3.7. The requirements regarding anti-money laundering and countering the financing of terrorism, as set out in Article (14) of this Regulation.
       
4. As part of the licensing process, separate face-to-face meetings between Central Bank staff and the Applicant’s board of directors and the Senior Management may be conducted.

Independent assessments

5. The Applicant is required to submit a report of independent assessments on seven key areas based on the scope set out in paragraphs 3.3 to 3.7 above: (a) corporate governance and risk management; (b) Float management; (c) technology risk management; (d) payment security management; (e) business continuity management; (f) business conduct and Customer protection; and (g) AML/CFT control systems.
    
6. The Central Bank expects the Applicant to appoint one or more competent and qualified assessor(s), which are independent from the business units of the Applicant, to carry out the independent assessments. The assessors should not be involved in the operations to be reviewed or in selecting or implementing the relevant control measures to be reviewed, have relevant knowledge and experience, and should be able to report their findings independently. They should also confirm to the Central Bank that there is no conflict of interest in the conduct of independent assessments.
    
7. Bank that are deemed to be licensed for providing of SVF, are exempted from the assessment report mentioned in paragraphs 5 and 6 above, unless the Central Bank explicitly requires the report from them.
    

Licensed bank to issue SVF

1. Although licensed banks are deemed to be authorized for the issuance of SVF, they are nevertheless required to notify the Central Bank in writing if they plan to issue an SVF and carry out the SVF business. A “No Objection” letter is required from the Central Bank before the licensed bank concerned can commence the SVF business.

Preliminary meeting with the Central Bank

2. Any company that is interested in obtaining a License may obtain the Application form from the Licensing Division of the Central Bank.
    
3. The Senior Management of the company is strongly encouraged to meet and discuss the SVF business plan with the Central Bank before submitting a formal Application.

Consultation with home regulator

4. Where the Controlling Shareholder of the Applicant is regulated by another authority, including by authorities in other jurisdictions, the Central Bank may contact the relevant authority about the Applicant. The Central Bank may take into account the relevant authority’s views in respect of matters such as the financial soundness and the overall internal control environment of the Controlling Shareholder, and whether the relevant home regulator has any concern about that Controlling Shareholding extending its SVF business to the State.

Completing and submitting the Application

5. The Application must be lodged with the Central Bank with the completed form and the required documents as set out in the Annex.

Processing of Application

6. The Central Bank may seek additional information from the Applicant to reach a decision on the Application. The circumstances of each particular Application will dictate the additional information required. Specifically, the applicant is required to submit a report of independent assessments as set out in paragraphs 5 and 6 of Article (3) of this Regulation. The validity of the assessment report should not exceed six months after the report’s sign-off date.
    
7. Incomplete information may result in delays. Applicants should, therefore, pay attention to the following points:
    
   1. 7.1. All Applications must be submitted with documents and information listed in the Annex. The Applicant will be informed in writing that the Application is complete and the processing of the Application will begin;
       
   2. 7.2. Where an Application received is incomplete or supporting documents or information is lacking, the Applicant will be informed in writing that the Application will be treated as “draft” and will be asked to complete the Application or provide the missing information by a date specified by the Central Bank. Once a properly completed Application with all necessary supporting documents and information is received, the Applicant will be notified in writing that Application is complete and the processing of the Application will begin;
       
   3. 7.3. Where information requested is not received by the specified date or a revised date agreed in writing by the Central Bank at the request of the Applicant, the Application may be treated as “suspended” and the Applicant will be notified of this in writing;
       
   4. 7.4. Where an Application is “suspended”, the Applicant will be informed in writing that the processing of the Application will cease temporarily. Suspended Applications will be reactivated only when the outstanding information is submitted; and
       
   5. 7.5. Where an Application is “suspended” for 6 months or more for any reasons, a new Application will generally be required if the Applicant wishes to pursue the matter further.

Approval of Application

8. The Central Bank may approve an Application for the License made by the Applicant provided that all the licensing criteria can be met by the Applicant.
    
9. The Central Bank may grant the License without conditions or subject to any conditions attached. Conditions attached to a License may include, among others, imposing a higher level of capital requirement, restrictions on the SVF business or any secondary or ancillary businesses, requirements relating to protection of the Float, and restrictions as to the maximum amount of value that may be stored on an SVF, etc.
    
10. If the Central Bank grants a License to the Applicant, the Central Bank will:
     
    1. 10.1. assign a unique reference number to the License; and
        
    2. 10.2. specify in the License the date on which the License is to take effect.
        
11. Specifically, a Licensee must ensure that the License reference number of the License is clearly displayed in the Licensee’s website and promotional materials.

1. The Central Bank may suspend, withdraw or revoke a License as stipulated in the Central Bank Law.
    
2. In considering whether to exercise such power, the Central Bank would have primary regard to the need to maintain the stability of the payment system in the State, reputation of the UAE and to protect the interests of the Customer or potential Customer of the Licensee in question.
    
3. Where a Licensee is suspended, withdrawn or revoked, the Licensee must immediately cease to take any further sum of money from Customers.
    

1. The Central Bank may take all measures and actions it deems appropriate for achieving its objectives and discharging its functions, and may particularly take the following actions, if it was found that a material violation to the provisions of this Regulation has occurred:
    
   1. 1.1. The Central Bank may require the concerned Licensee to take necessary actions to rectify the situation immediately;
       
   2. 1.2. Appoint a specialized expert, or a Central Bank employee, to advise or guide the concerned Licensee, or oversee some of its operations, for a period specified by the Central Bank. The concerned Licensee shall pay remunerations of such appointee if he is an expert from outside the Central Bank; or
       
   3. 1.3. The Central Bank may appoint a manager where the Central Bank is of the view that the management of the Licensee cannot be relied upon to take appropriate steps to rectify a situation. The main objectives of appointing a manager to take control of the management of a Licensee are:
       
      1. 1.3.1. to provide for the control of the affairs, business and property of a troubled Licensee so that it can be nursed back to health or else be run down in an orderly fashion; or
          
      2. 1.3.2. to safeguard the assets and maintain the business of the Licensee until a liquidator can be appointed
          
   4. 1.4. Take any other action or measure, or impose any penalties it deems appropriate.