EMI's application of negative interest rates to its clients

Article 12 of Directive 2009/110/EC on the taking up, pursuit and prudential supervision of the business of electronic money institutions (EMD2) provides that “Member States shall prohibit the granting of interest or any other benefit related to the length of time during which an electronic money holder holds the electronic money”. This prohibition is related to and a consequence of the status of electronic money as distinct from deposits and other repayable funds. This delineation is articulated in Article 6(2) EMD2, which states that “electronic money institutions shall not take deposits or other repayable funds from the public within the meaning of Article 5 of Directive 2006/48/EC”. Article 6(3) EMD2 further states that any funds received by electronic money institutions from the electronic money holder shall be exchanged for electronic money without delay and shall not constitute either a deposit or other repayable funds received from the public within the meaning of Article 5 of Directive 2006/48/EC. Since the funds received by electronic money institutions in exchange for electronic money must be converted into electronic money and do not constitute deposits or other repayable funds, there is no scope for the application of interest rates, regardless of whether they are positive or negative.   Disclaimer: The answer clarifies provisions already contained in the applicable legislation. They do not extend in any way the rights and obligations deriving from such legislation nor do they introduce any additional requirements for the concerned operators and competent authorities. The answers are merely intended to assist natural or legal persons, including competent authorities and Union institutions and bodies in clarifying the application or implementation of the relevant legal provisions. Only the Court of Justice of the European Union is competent to authoritatively interpret Union law. The views expressed in the internal Commission Decision cannot prejudge the position that the European Commission might take before the Union and national courts.