IEIM401562 - Financial Accounts: Depository Account: Specified Electronic Money Products: Redemption Requirement
Condition (e) of the Specified Electronic Money Product (SEMP) definition, as detailed at Section VIII.A(9) of the CRS, requires that a SEMP, “by virtue of regulatory requirements to which the issuer is subject, is redeemable at any time and at par value for the same fiat currency on request of the holder of the product”.
In order for this requirement to be met, it must be satisfied with respect to the issuance of the product as a whole, such that all the units or tokens forming part of the issuance are effectively subject to the requirement.
Where the SEMP is subject to substantive restrictions that effectively restrict or limit the holder’s regulatory right to request redemption at any time and at par value, it would not meet the conditions to be considered a SEMP.
Procedural and prudential restrictions or conditions that are applicable in accordance with the laws to which the issuer is subject, are compatible with the requirements provided they do not undermine par redemption. This may include, for instance, the application of reasonable redemption fees, Anti-Money Laundering checks or other checks for illegal activity, or the limitation of redemption to business hours or designated customer service channels.
When making a determination as to whether a SEMP qualifies in respect of condition (e), a Financial Institution may rely on the relevant regulatory authorisations or approvals granted in respect of that product.