Eligibility Criteria
Introduction
When seeking to establish a Banking Services relationship with LHV, it's essential to understand the eligibility criteria, assessment criteria, and compliance requirements. These factors play a crucial role in LHV's evaluation of potential clients, ensuring we maintain high financial industry standards.
Companies looking to establish a relationship with LHV must complete the following steps to start the process:
- Complete our application form
- Provide relevant supplementary due diligence questionnaires
- Submit appropriate supporting documentation
Once we receive your full application pack and confirm it meets our initial eligibility criteria, we will provide a preliminary approval in proceeding to the full assessment process shortly afterwards. We typically communicate this decision within 1 to 2 weeks, and LHV strives to provide a final onboarding decision within 8 to 10 weeks after completing the necessary reviews and assessments. We are committed to evaluating every application on a proportionate, objective, and non-discriminatory basis.
We will continue to monitor your firm's adherence to our criteria on an ongoing basis after agreeing on a contract. If any issues arise, we will promptly address them through discussion and action as necessary.
The sections below outline our eligibility criteria and provide a non-exhaustive explanation of the factors we consider during our assessments.
Eligibility Criteria
The following criteria must be fulfilled to be eligible to apply for a Banking Services relationship with LHV:
Regulatory Status
Your company must be a regulated financial institution supervised by the Financial Conduct Authority (FCA), the Prudential Regulation Authority (PRA), HM Revenue and Customs (HMRC) and/or equivalent regulators in the EEA or Gibraltar (the regulation must cover all current and envisaged business). Companies in the final stages of obtaining approval may also be considered.Institution Type
The following criteria must be fulfilled to be eligible to apply for a Banking Services relationship with LHV:- Authorised E-Money Institution
- Authorised Payment Institution
- Bank
- Building Society
- Investment firm
- Credit Union
- Gibraltar Financial Services Commission (GFSC) Regulated Financial Institution
Funding and Wealth
Funding of your company and the source of wealth of the UBOs must be from reputable sources.Management Team
Each senior management team member must have a credible background and appropriate experience.Micro-enterprise
Your company should not be an autonomous micro-enterprise (employing fewer than ten persons and having a turnover or annual balance sheet not exceeding €2 million).Guidance on the definition of “partner” and “linked enterprises”, which means your company may not be an autonomous micro-enterprise, is described in the User Guide to SME definition.
Operations
You must have in place appropriate policies, procedures, processes, systems, and staff with relevant experience commensurate with your business model and the types of clients you serve.Adverse Media
Your company, its linked entities or persons, such as founders, shareholders, directors, and UBOs, should not be subject to adverse media that LHV considers material to the risk your firm may pose.Safeguarding Measures
Where relevant, you must have appropriate measures in place to protect your customers’ funds, including completing relevant safeguarding letters.Risk Profile
The risk profile of your client portfolio and product suite should align with LHV’s risk appetite.Financials
Demonstrate healthy financials or provide evidence of sufficient company funding where necessary.Compliance Culture
A strong compliance culture must be evident within the organisation.
Assessment Criteria
To ensure a successful application and a strong Banking Services relationship with LHV, applicants must meet specific assessment criteria. During the evaluation process, we will consider various factors, as detailed below:
Review of Materials
We will review all materials you submit and may require additional information to be provided during our review.Volume Requirements
We will determine whether the proposed volumes meet minimum revenue and monthly payment levels.Risks and Opportunities
We will consider the risks and opportunities each applicant represents to LHV, assessing them against our commercial objectives and potential risks resulting from the relationship.
Key factors considered during the assessment include:
- Business Sectors
The sectors in which you are involved - Client Types
The types of clients your business services, including, where relevant, their form of incorporation - Geographic Activities
The countries in which you and your clients have activities and propose to transact - Specific Risks
Any other specific risks that you or your clients could present to us
Additionally, we will take into account:
- Deposit Value
The expected value of deposits you plan to make with us in the context of overall LHV deposit levels - Transaction Volume Proportion
The proportion of transaction volumes that your business will represent in the context of overall transaction volumes - Financial Crime Risk
The potential financial crime risk posed by you or your clients in the context of existing risks - Reputational Risk
The potential reputational risk posed to LHV in our association with you or your clients
Compliance Requirements
In addition to the eligibility and assessment criteria, applicants must adhere to essential compliance requirements to maintain a robust Banking Services relationship with LHV. The compliance requirements focus on ensuring that your company upholds adequate anti-financial crime and regulatory measures:
Regulatory Permissions
Your regulatory permissions must be sufficient to conduct current and envisaged business in relevant jurisdictions.Money Laundering Reporting Officer
You must have appointed a sufficiently independent and experienced Money Laundering Reporting Officer.Anti-Financial Crime and Compliance Programme
Your program must be adequate, including policies and procedures, risk assessment processes, training, customer due diligence (including enhanced due diligence triggers and measures), human resources, technical capability, and governance arrangements.Transparency of Payment Flows
Your payment flows must be transparent, understandable, and make economic sense.Client Risk
Confirm that the clients with whom you do business are within LHV's risk appetite.Third-Party Audit
If any third-party audit has been executed, ensure any findings are appropriately addressed.Funds Transfer Regulation
LHV requires customers to comply with the transparency provisions of the Funds Transfer Regulation when making payments on behalf of their underlying clients.
The purpose of LHV’s Eligibility and Assessment Criteria is to ensure that any assessment of a UK/EEA Non-Bank Payment Service Provider (“NBPSP”) is performed in accordance with Regulation 105 of the Payment Services Regulations 2017 and that all assessments are undertaken on a proportionate, objective and non-discriminatory (POND) basis. To be eligible to receive services, an NBPSP must meet our criteria detailed above.
