Safeguarding in Spain: art. 21 RDL 19/2018 and Ley 21/2011
Safeguarding in Spain sits in Article 21 of Real Decreto-ley 19/2018 for payment institutions and Article 9 of Ley 21/2011 for e-money institutions, and the two do not offer the same choice. A Spanish entidad de pago picks either segregation or insurance. A Spanish entidad de dinero electrónico must segregate unless the Banco de España authorises insurance. The detail sits in two royal decrees, which add a naming rule for the bank account, a one-month notice for over-funding and six conditions any insurance policy must meet. This piece sets out both regimes, compares them, and works through four cases.
1. The texts
Four instruments carry the Spanish rules:
- Real Decreto-ley 19/2018, the Spanish transposition of PSD2 (Directive (EU) 2015/2366). Article 21 sets the two safeguarding methods for payment institutions.
- Real Decreto 736/2019, the implementing decree for payment services and payment institutions. Article 16 sets the practical conditions.
- Ley 21/2011 on electronic money, transposing EMD2 (Directive 2009/110/EC). Article 9 sets the e-money regime.
- Real Decreto 778/2012 on e-money institutions. Its Article 16, as amended by RD 736/2019, mirrors the payment-institution conditions and points to Article 21 RDL 19/2018.
Article 9 of Ley 21/2011 still refers to the old Payment Services Law, Ley 16/2009. The amended RD 778/2012 refers to Article 21 RDL 19/2018 instead, which is how the two regimes read together today.
2. Payment institutions: Article 21 RDL 19/2018
The duty applies to payment institutions providing the services in letters a) to f) of Article 1.2 RDL 19/2018. Funds received from users, or through another payment service provider, for the execution of payment transactions must be protected by one of two methods.
Method a) — segregation. The funds are never mixed with the funds of anyone other than the users for whom they are held. If they are still with the institution at the end of the business day after receipt — not yet delivered to the payee or transferred to another provider — they go into a separate account at a credit institution or are invested in safe, liquid, low-risk assets. Once in that account, the funds are protected: if the institution enters concurso (insolvency), users have an absolute right of separation over the accounts and assets against other creditors.
Method b) — insurance or a comparable guarantee. A policy from an insurer, or a comparable guarantee from an insurer or credit institution outside the institution’s group, for the amount that would otherwise have been segregated, payable if the institution cannot meet its financial obligations.
The method chosen is made public and recorded in the Banco de España’s special register of payment institutions. Where part of a fund pool is used for future payment transactions and the rest for non-payment services, the payment part is safeguarded too. If that part varies or is unknown, a representative fraction may be used, provided the Banco de España accepts it as a reasonable estimate based on historical data (Article 21.2).
3. The conditions in RD 736/2019
Article 16 RD 736/2019 adds the working rules.
- Disclosure. The method appears in the special register, in framework contracts or conditions of use, on the institution’s website and in any advertising for its payment services, in clear and accessible terms.
- Changing method. The institution notifies the Banco de España under the procedure of Article 6. A change of method — but not a change of guarantor — also follows the rules for amending framework contracts in Article 33.1 RDL 19/2018.
- Over-funding. The separate account may hold more than customer funds only if the institution has told the Banco de España about the surplus and its amount at least one month in advance, and still meets its capital and own-funds requirements after deducting it. The deducted amount goes in the notes to the annual accounts.
- Eligible assets. Demand deposits at prudentially supervised credit institutions domiciled in the EU, whose name expressly states that they are saldos de clientes de “entidad de pago”; and assets with a zero risk weight under Article 114 of Regulation (EU) No 575/2013.
4. Six conditions for insurance or a guarantee
Where an institution uses method b), Article 16.3 RD 736/2019 requires that:
- the guarantee is direct and payable on first demand, and an insurance policy has equivalent effect;
- its scope is clearly defined and legally valid and enforceable;
- it covers all payment services in letters a) to f) and all user funds held when the insolvency order is made, including funds in transit and funds held by the institution’s agents;
- it contains no clause outside the institution’s control that lets the provider cancel it unilaterally or shorten its term, without prejudice to Articles 10, 12 and 15 of the Insurance Contract Law (Ley 50/1980);
- it pays out once the court declares the institution in concurso, and payment orders already requested are executed immediately unless the insolvency administrator decides otherwise;
- the insurer or credit institution is authorised to operate in Spain and is not in the same group as the institution, as defined in Article 42 of the Commercial Code.
5. E-money institutions: Article 9 Ley 21/2011
For e-money, segregation is the default. Article 9.1 requires the institution to safeguard funds received in exchange for e-money issued using the segregation method. Funds that arrive through a payment instrument — a card top-up, for example — need not be safeguarded until they are credited to the institution’s payment account or otherwise made available to it. In any case they must be safeguarded no later than five business days after the e-money is issued.
Article 9.2 extends the same protection to funds received for payment services not linked to e-money issuance. Article 9.4 allows the representative-fraction approach where some funds will become future e-money and the rest serve other activities.
The key difference is Article 9.3: the Banco de España may authorise, at the institution’s request, the insurance or guarantee method, either for e-money funds or for funds for unrelated payment services. Article 16 RD 778/2012 confirms it: segregation applies unless that authorisation is given. A payment institution chooses; an e-money institution asks.
The other conditions in Article 16 RD 778/2012 mirror RD 736/2019. They include disclosure, one-month notice for over-funding, demand deposits named as saldos de clientes de “entidad de dinero electrónico”, zero-risk-weight assets and the six insurance conditions. Two additions:
- in exceptional and justified circumstances, the Banco de España may decide, after a risk assessment, that a given asset does not count as safe and low-risk;
- the institution must make sure that the terms of its deposits, opened under the right of access to bank accounts in Article 16 bis Ley 21/2011, do not conflict with the segregation requirement.
6. Side by side
| Point | Payment institution | E-money institution |
|---|---|---|
| Main rule | Art. 21 RDL 19/2018; art. 16 RD 736/2019 | Art. 9 Ley 21/2011; art. 16 RD 778/2012 |
| Method choice | Segregation or insurance, at the institution’s choice | Segregation; insurance only with Banco de España authorisation |
| Timing | Separate account if still held at end of next business day | Card-funded e-money: once credited, and no later than 5 business days after issuance |
| Account name | “saldos de clientes de ‘entidad de pago'” | “saldos de clientes de ‘entidad de dinero electrónico'” |
| Over-funding | One month’s notice; deduct from own funds; disclose in notes | Same |
| Insolvency | Absolute right of separation for users | Segregation follows the same Article 21.1.a) method |
7. Worked case: a buffer in the safeguarding account
Facts: a payment institution keeps a EUR 200,000 buffer of its own money in the safeguarding account so that timing gaps never leave customer funds short.
What the rule says: the account may exceed customer funds only after one month’s notice to the Banco de España, stating the amount, and only if own-funds requirements are still met after deducting the buffer.
What the practitioner does: sends the notice before topping up, re-runs the own-funds calculation with the buffer deducted, and tells finance to show the deduction in the notes to the annual accounts. The daily reconciliation shows the buffer as a separate line.
Outcome: the buffer protects customers without being treated as commingling, and the audit trail shows it was authorised.
8. Worked case: an EMI that wants insurance
Facts: a Spanish e-money institution wants to replace part of its segregation with an insurance policy so that it can free up liquidity.
What the rule says: an e-money institution needs Banco de España authorisation under Article 9.3 Ley 21/2011 before it uses method b). The policy must meet all six conditions, and the change of method follows the framework-contract amendment regime.
What the practitioner does: has counsel check the draft policy against the six conditions — especially first-demand payment, cover for agents’ funds and the absence of unilateral cancellation clauses — and confirms the insurer is authorised in Spain and outside the group. Then applies to the Banco de España. Only after authorisation does it update the register entry, customer terms, website and advertising.
Outcome: no customer funds are left uncovered between the old method and the new one.
9. Worked case: the wrong account title
Facts: an internal audit finds that the safeguarding account at the institution’s bank is titled with the company name only.
What the rule says: an eligible demand deposit must expressly carry the “saldos de clientes” wording. Without it, the deposit does not meet the definition of a safe asset.
What the practitioner does: asks the bank to retitle the account and to confirm in writing that it holds customer funds, records the finding and the fix, and checks every other safeguarding account and custody account.
Outcome: a documented remediation, rather than a finding raised later by the supervisor.
10. Worked case: a hybrid payment institution
Facts: a payment institution also runs a non-payment business. Customer prepayments sit in one pool, and the share later used for payment transactions is not known in advance.
What the rule says: Article 21.2 lets the institution safeguard a representative fraction, provided the Banco de España accepts it as a reasonable estimate from historical data.
What the practitioner does: builds the estimate from at least a full business cycle of data, documents the method, and reviews it when the business mix changes.
Outcome: a fraction that can be defended, instead of a guess that has to be explained after an inspection.
FAQ
Which article governs safeguarding for Spanish payment institutions?
Article 21 of Real Decreto-ley 19/2018, with the conditions in Article 16 of Real Decreto 736/2019.
And for e-money institutions?
Article 9 of Ley 21/2011 and Article 16 of Real Decreto 778/2012.
Can a Spanish EMI use insurance instead of segregation?
Only if the Banco de España authorises it at the institution’s request, under Article 9.3 Ley 21/2011.
What is the deadline for safeguarding card-funded e-money?
Once the funds are credited to the institution’s payment account or otherwise available to it, and in any case within five business days of issuing the e-money.
Can we keep our own money in the safeguarding account?
Only after notifying the Banco de España of the surplus and its amount at least one month ahead, and only if own-funds requirements are met after deducting it.
Where must the chosen method be disclosed?
In the Banco de España special register, in framework contracts or conditions of use, on the website and in advertising.
What to do, today
- Head of finance: check every safeguarding account title against the “saldos de clientes” wording.
- Compliance: compare your register entry, customer terms, website and advertising — all four must state the same method.
- EMIs on insurance: keep the Banco de España authorisation on file with the policy, and diary its review date.
- Treasury: if you hold a buffer, confirm the one-month notice was sent and the deduction appears in your own-funds calculation.
Related: Safeguarding compared across the EU · Safeguarding account · Safeguarding reporting and attestations
