ECOVIS ProentusLaw welcomes to its newsletter on recent regulatory developments for Electronic Money Institutions (EMIs) and Payment Institutions (PIs).
Bank of Lithuania Revokes KogoPay UAB License and Seeks Bankruptcy
The Bank of Lithuania has revoked the electronic money institution license of KogoPay UAB and will apply to the Vilnius Regional Court to initiate bankruptcy proceedings. The regulator found that the company failed to meet its funds requirements in early 2025, delayed submitting mandatory financial reports, and is insolvent, with liabilities exceeding assets. KogoPay admitted it could not meet its obligations and lacked realistic prospects for investment or recovery. 2024 the company was fined €30,000 for safeguarding and reporting violations.
Key Takeaways for Market Participants:
1. Ensure Ongoing Capital Adequacy:
Financial institutions must consistently meet their own funds requirements. Falling below minimum thresholds — even temporarily — can trigger severe regulatory actions, including license revocation.
2. Timely and Accurate Reporting:
Delays or failures in submitting mandatory financial reports compromise regulatory oversight and signal potential mismanagement. Institutions should implement reliable internal controls to ensure timely reporting to supervisors.
FAQ by the Bank of Lithuania
Q: Do the provisions of the Description of the Management Procedures, Internal Control Systems, and Client Funds Protection Requirements for Electronic Money Institutions and Payment Institutions (effective from January 1, 2026) mean that the boards of electronic money and payment institutions without a supervisory board, which perform supervisory functions assigned to the supervisory authority in this Description, must comply with the requirements set out in Article 33(6)(3) and (7) of the Republic of Lithuania Law on Companies?
A:, The Description does not require electronic money and payment institutions (hereinafter – Institutions) without a supervisory board to assign the functions prescribed in Article 34(11) of the Republic of Lithuania Law on Companies (Law on Companies) to the board, nor does it require applying the additional board composition requirements set out in Article 33(6)(3) and (7) of the Law on Companies related to the delegation of these functions.
The new Description does not regulate the allocation of supervisory functions under Article 34(11) of the Law on Companies among the Institution’s bodies. References to the supervisory authority in certain points of the Description (e.g., points 22, 24, 35.1, 35.3, 37, 47, 49, 51, 56, and 57) should be understood as references to the Institution’s board when there is no supervisory board, regardless of whether the board has been assigned the functions under Article 34(11) and irrespective of the additional composition requirements.
Therefore, when determining its governance structure, the Institution must evaluate whether the body’s composition allows it to perform the assigned functions and ensure compliance with legal requirements.
Bank of Lithuania Prepares EMIs and PIs for REGATA Transition and MiCAR-Driven Reporting Changes
The Bank of Lithuania outlined major updates to reporting requirements for Electronic Money Institutions (EMIs) and Payment Institutions (PIs) under the upcoming MiCAR framework, alongside the transition to the new REGATA reporting system starting 1 January 2026.
Key takeaways:
- New MiCAR-linked reporting items: Balance sheet and profit/loss forms will now include electronic money token issuance and other crypto-asset holdings.
- Reports discontinued: Loan report (EM008_06) and employee count report (EM008_08).
- Updates to existing reports:
– Secure, liquid, and low-risk assets must break down client funds in the balance sheet.
– Funds-in-separate-account report expanded to cover payment accounts for client transactions; now quarterly + annual.
– Major safeguarding changes (EM008_12) must be reported within 5 business days, replacing the closure/restriction report (EM008_11).
– Services report expanded to cover activity suspension >6 months.
– Professional indemnity insurance forms (EM008_13 + EM008_14) merged.
- New report: Investment of safeguarded funds (VPT01) — quarterly + annual (not for payment initiation/account info providers).
- Two structured data forms were introduced: Receivables/Payables (ST_01) and Commission Income/Expense (ST_02).
- Timeline:
– 2025 year-end reports follow current iAPS rules.
– REGATA live for ad hoc reports from 1 Jan 2026; periodic reports from Q1 2026.
– Mandatory EM008_12 submission by 30 June 2026 for current safeguarding status.
– Testing must start ≥2 months before deadlines; production access granted ≥1 month before deadlines.
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