Regulation and safeguarding of customer funds
Holvi is a payment institution authorised by the Finnish Financial Supervisory Authority (FIN-FSA) to operate in the European Union (EU) and the European Economic Area (EEA). The operations of Holvi's branch in Germany are supervised by the Federal Financial Supervisory Authority (BaFin) under German law.
As a payment institution, Holvi does not take customer deposits. Instead, the funds on a Holvi payment account are managed as safeguarded customer funds. This means that Holvi manages the funds on behalf of its customers. The customers’ safeguarded funds are legally separate from Holvi's own funds.
In the unlikely event that Holvi were to become insolvent, the safeguarded customer funds would not be accessible to Holvi's creditors. The safeguarded customer funds would remain available to Holvi's customers.
How we manage our customers’ safeguarded funds
The European regulations around the management of segregated customer funds are set out in the Payment Services Directive (PSD2, Article 10). Specific regulations for payment institutions on the management of customer funds are provided to Holvi in the FIN-FSA Regulations (“Payment institutions and payment service providers”, 8/2016; last revised 7 March 2023).
Payment institutions can safeguard customer funds in two primary ways:
- Customer funds can be deposited at:
- Credit institutions (i.e. banks)
- Central banks
- Customer funds can be placed in secure and liquid low-risk assets
1. Customer funds safeguarded at credit institutions and central banks
1.1. At credit institutions
With customer funds deposited at banks the standard European deposit insurance of €100,000 applies for each Holvi customer per depository bank. If one of the banks where Holvi deposits its customers’ funds were to fail, up to €100,000 per Holvi customer would be covered by deposit insurance.
It is important to understand that, if a Holvi customer also has an account at a specific bank directly, the maximum deposit insurance per customer is €100,000 for each bank.
The banks where Holvi deposits customer funds are the commercial banks Nordea Bank and Aktia Bank, both authorised and supervised in Finland, and OP Uusimaa, a member bank of the largest group of cooperative banks in Finland.
1.2. At central banks
Holvi also deposits customer funds with central banks that are members of the Eurosystem. While deposits at central banks do not have deposit insurance, central banks that are members of the Eurosystem are the safest institutions in the eurozone financial system.
2. Customer funds safeguarded in government treasury bills
Holvi also places customer funds in government issued treasury bills. These are short-term government bonds issued by eurozone governments on a regular basis to finance their day-to-day activities.
The government bonds in which Holvi places customer funds in are issued by the German, Dutch, French and Belgian governments. The maximum maturity of the government bonds is six months and the bonds can be redeemed daily.