Small Electronic Money Institution (SEMI)
A small electronic money institution is a UK firm registered by the FCA to issue electronic money below a set limit, rather than authorized. It is a separate status from an authorized EMI, not a smaller version of one: lighter prudential requirements, a cap on outstanding e-money, and narrower permissions.
Also called: small EMI · SEMI · small electronic money institution · registered EMI
Registered, not authorized
Registration and authorization are different legal acts. The FCA authorizes an electronic money institution after a full assessment of its business model, systems, capital and people. A small electronic money institution is registered on a lighter assessment, and the public register says which status a firm holds. Both appear on the register; they do not confer the same thing.
What the cap actually measures
It is not turnover. A small EMI’s total business activities must not generate average outstanding electronic money above EUR 5,000,000, and a separate limit of EUR 3,000,000, as a monthly average over twelve months, applies to payment transactions unrelated to issuing e-money. The UK regulations still state both figures in euro, so a firm near either one has to watch the exchange rate as well as its own volumes. Where average outstanding e-money reaches EUR 500,000 or more, the firm must hold own funds of at least 2 percent of that amount, and it may not provide account information services or payment initiation services at all. Some duties do not soften: safeguarding of customer funds still applies, as do anti-money-laundering obligations.
Passporting is not the distinction people reach for. No UK firm, authorized or registered, has held EEA passporting rights since 11pm on 31 December 2020, so a small EMI’s inability to passport into Europe is a consequence of Brexit shared with every authorized EMI rather than a feature of the smaller status. The EU’s own equivalent is a waiver a member state may choose to operate for small issuers, capped at the same EUR 5,000,000 of average outstanding e-money, and a waived issuer has no passport either.
Growing out of the status
The cap is a live constraint rather than a formality. Exceeding it means the firm no longer meets the conditions of its registration, and the FCA expects firms to monitor the figures closely enough to know when the requirement to become authorized is triggered; where the conditions are no longer met it can vary or cancel the registration. Nothing upgrades automatically — the firm applies, is assessed on the full standard, and the FCA decides. Leaving that late is the usual failure: the business reaches the limit before authorization is granted and has to hold volume back.
In practice
A small electronic money institution is registered, not authorized, and it is a different status from an authorized EMI rather than a smaller version of one. The binding cap is average outstanding electronic money, not turnover, and the UK regulations still express it in euro. Exceeding it means applying for full authorization — nothing upgrades automatically; the firm applies and the FCA decides — and the FCA can vary or cancel a registration whose conditions are no longer met. Do not treat “small EMI”, “SEMI” and “EMI” as interchangeable.
Example
A payments startup registers as a small EMI to launch a UK wallet. Two years later its e-money in issue is approaching the registration limit and a European client wants service in Germany. Neither is available on the registration: the firm has to apply for full EMI authorization for the headroom, and EU market access is a separate question again.
Commonly confused with
| Term | How it differs |
|---|---|
| Electronic Money Institution | An authorized EMI has no turnover cap and was assessed on the full standard; a small EMI is a registration with a cap and reduced requirements. |
| Small Payment Institution | An SPI may provide payment services but may not issue electronic money; a small EMI may issue e-money within its limit. |
See also
- Electronic Money InstitutionA firm authorized in the United Kingdom or in an EU member state to issue electronic money and to provide payment services. The e-money it issues is a claim its holders have against the institution, redeemable at par and expressly not a deposit, which is why the funds behind it must be safeguarded.
- Small Payment InstitutionA small payment institution is a UK registration for a payment firm whose payment transactions average no more than EUR 3 million a month. It is registered rather than authorized, carries no ongoing capital requirement, and cannot be used to provide account information or payment initiation services, or to issue electronic money.
- SafeguardingSafeguarding is the statutory requirement that an authorized payment or e-money firm keep customer funds apart from its own money, by a method the rules prescribe, so the funds are identifiable and returnable to customers if the firm fails. It is a licensing condition, not best practice.
- PassportingPassporting is the mechanism by which a firm authorized in one EEA state may provide its services in the other EEA states without seeking separate authorization in each one. The home state regulator continues to supervise the firm throughout.
- Financial Conduct AuthorityThe Financial Conduct Authority is the United Kingdom’s conduct regulator for financial services. It decides whether a payments or e-money firm may operate in the UK, authorizes or registers it, and supervises how it behaves afterwards.
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Regulatory information checked: 22/Sep/2026