ARTICLE
Getting ready for CENTROlink's new safeguarding requirements
26 August 2024
In August 2024, the Bank of Lithuania’s SEPA gateway CENTROlink announced that its payment institution (PI) and electronic money institution EMI) customers must comply with new safeguarding requirements by April 2025.
This blog breaks down these changes and their causes, the consequences for CENTROlink’s customers, and how to comply on time.
CENTROlink’s new safeguarding requirements
Any payment or electronic money institution licenced in the EU must safeguard customer funds.
The most common safeguarding method is to keep customer funds in a segregated safeguarding account held at a credit institution.
When onboarding with CENTROlink, PIs and EMIs open two types of accounts at the Bank of Lithuania:
- Account(s) of customer funds: accounts credited or debited when the PI or EMI sends or receives SCT and SDD (FC account) or SCT Inst (FC Inst account) on behalf of their customers. Such accounts are commonly named settlement accounts.
- Account of own funds (FC2): account that holds financial collateral to secure the fulfilment of obligations related to the services provided by the Bank of Lithuania and liabilities to the Bank of Lithuania.
Until their August announcement, the Bank of Lithuania considered that PIs / EMIs could use FC accounts to safeguard their customer funds in compliance with EU regulations.
Article III.13
From the moment of its opening, the account(s) of customer funds is dedicated only for holding and managing the funds received by [PI or EMI]. [...] The [PI o EMI]’s customer funds are held in the payment system in full compliance with the requirements of Article 10 of Directive (EU) 2015/2366 of the European Parliament [...]
Article 10 of Directive (EU) 2015/2366 is PSD2’s article on safeguarding requirements.
In August 2024, the Bank of Lithuania announced that this would no longer be the case and would no longer provide PIs and EMIs with dedicated safeguarding accounts starting from April 2025.
This change will significantly impact CENTROLink’s PI and EMI customers by forcing them to safeguard their funds in third-party credit institutions.
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