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That EML Payments Ltd. (ASX: EML) stock price will be monitored Friday after the company announced an update regarding Central Bank of Ireland (CBI).
EML Payments’ CBI Update
The payment company said its Irish-regulated subsidiary, PFS Card Services (Ireland) Limited (PCSIL), has received more correspondence from the CBI on regulatory concerns and potential directions regarding the remediation plan and significant growth.
The nature of these potential directions is more limited than those originally foreshadowed by the CBI in May 2021. However, as it is framed now, the EML believes that the direction could significantly affect European Prepaid Financial Services (PFS) operations. ) business.
The remediation program is currently underway and there are improvements to the governance with the PCSIL Board. But the CBI has stated that PCSIL’s proposed policy growth policy is higher than what the CBI “would like to see”.
In addition, the CBI has proposed that certain limits be applied to programs which, if implemented, could adversely affect the PCSIL business. The EML said that, subject to the approval of the PCSIL board, it will submit to the CBI a “substantial and detailed” analysis of limits applied to nearly 27,000 programs in the next week, along with a proposed recalibration of limits for certain programs.
Time will tell how the EML Payments stock reacts to this news.
The CBI has invited PCSIL to provide it with the potential directions that PCSIL intends to make by October 28, 2021.
There is an ongoing dialogue with the CBI about the reorganization plan, which the EML said is still on track.
Does this affect the whole business?
The EML confirmed that these issues do not concern its Australian or North American activities, the UK subsidiary regulated in the UK, the other Irish regulated subsidiary (EML Money DAC), Sentenial and Nuapay, EML’s French regulated subsidiary.
The company sought to reassure investors by saying that it is subject to regular audits by various parties, including central banks, payment schemes, external and internal auditors and other third parties.
The EML said it takes regulatory compliance, including the fight against money laundering and counter-terrorism financing, risk management and governance very seriously, and is committed to ensuring that its global operations meet the highest standards of risk and compliance.