The EU’s top payments regulator has stepped into a row between member states over supervision of firms passporting across national borders, taking a relatively tough stance on the controversial issue.
Many payment and e-money institutions currently rely on networks of agents or distributors to passport services into other member states. That can be done under two EU legal mechanisms: the freedom to provide services or the right to establishment.
Firms often prefer the former, as it means they are supervised only by their home authority. For example, a UK-authorised remittance firm that has agents in Italy would be accountable to the Financial Conduct Authority (FCA).
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