Navigating Stored Value Facilities (SVF) Licensing in the UAE

What Are Stored Value Facilities (SVFs)?

SVFs are systems through which a customer pays money or transfers value (including via bank transfers, crypto assets, points, etc.) to an issuer in exchange for stored value—accessible via physical devices (e.g., prepaid cards, wearables) or digital platforms (e.g., e-wallets). They may also cover single-purpose SVFs, such as closed-loop schemes for specific goods or services.

Banks are exempt from SVF licensing but must notify the Central Bank in writing and obtain a “No Objection” letter before commencing SVF operations.

Initial Details to Prepare for Licensing

1. Legal Structure & Incorporation

• The applicant must be a company incorporated in the UAE (mainland or free zones)—excluding financial free zones like DIFC and ADGM.
• Disclose any secondary or ancillary activities not directly related to SVF issuance.

2. Capital & Financial Requirements

• Paid-up capital of at least AED 15 million (or equivalent in another approved currency).
• Aggregate Capital Funds (paid-up capital + reserves + retained earnings – accumulated losses – goodwill) must be at least 5% of total customer float (i.e., the funds held within the SVF).
• Submit an unconditional, irrevocable bank guarantee for the full paid-up capital, payable on first demand, renewable as required.

3. Governance, Risk Management, and Internal Controls

• Define a corporate governance framework—including Board of Directors, senior management, and controlling shareholder—who must be deemed "fit and proper" by the Central Bank.
• Establish a strong risk management, internal control, and accounting system, approved by the board.

4. Technology Risk, Information Systems & Float Protection

• Implement comprehensive technology risk management, including controls for development, change management, segregation of duties, source code reviews, infrastructure baseline security, etc.
• Ensure float protection—the ability to always redeem stored value.
• Develop robust information and data management, including storing data in the UAE and ensuring proper classification, access control, retention, and disposal.

5. Business Conduct & Consumer Protection

• Implement clear business conduct policies and customer protection mechanisms.

6. AML/CFT and Compliance

• Build and demonstrate effective AML/CFT controls, aligned with UAE regulatory obligations.

7. Independent Assessment

• Engage independent, competent assessors—external to business units—to evaluate readiness and compliance. They must confirm no conflict of interest and submit a report valid for up to six months.

8. Application Procedure & Engagement

• Obtain the application form from the Central Bank’s Licensing Division and submit it along with required annex documents.
• A preliminary meeting with senior management is recommended to discuss your SVF business plan.
• Banks still need to notify and obtain "No Objection" from the Central Bank.
• Be prepared for the Central Bank to request additional information. Incomplete applications may be treated as draft and delay the process.

Summary Table: Key Prep Areas for SVF Licensing

Applying for a Stored Value Facilities (SVF) license requires precision, compliance, and early preparation. Crowe’s regulatory specialists help you navigate the Central Bank requirements, streamline documentation, and secure approval with confidence. Connect with us today to begin your SVF journey the right way. Contact [email protected] | +971 553438693