Payments Law Update: Winter 2017
Published on 9th Feb 2017
On 2 February 2017, we welcomed the publication of HM Treasury’s consultation paper on implementing PSD2 and the draft regulations. The paper confirms that the government’s default approach for implementing EU legislation is copy-out; however, to reduce the cost for businesses and consumers, the government proposes to build on the existing PSRs, including the continued use of derogations exercised in the implementation of the PSD, in order to ensure continuity and consistency with the implementation of the PSD in the UK and that the payment services regime remains, as far as is possible, tailored for the UK payments market. The draft regulations revoke the existing PSRs and replace them with a new set of Payment Services Regulations. The government considers that this is likely to make the UK legislation easier to use. Large parts of the new draft regulations reproduce the equivalent parts of the PSRs.
We completely agree with this approach. It would also be fair to say that there aren’t many surprises in the paper but that is not unexpected given HM Treasury’s remit in relation to implementation. As expected, principal areas of focus will continue to be in relation to the use of strong customer authentication and the new services of account information and payment initiation being offered by third party providers. Questions around timing for industry, rather than regulator, guidance, the availability of professional indemnity insurance and necessary technological changes to allow access (especially within tight time frames) will be key.
If you would like to discuss the implications of the consultation paper or any of the content below, or indeed if you have a subject that you would like us to cover in the next edition, please let us know. Our contact details are set out below.
Best regards,
Paul Anning and Kate Johnson
Payments Services: regulatory timeline
Last year we published a regulatory timeline of key dates from 2015 to 2018 to help you prepare for the various upcoming regulatory deadlines.
It was a busy year, and some provisional dates were confirmed or changed, and some new initiatives were announced. We have updated our timeline accordingly, retaining publications from 2016 in order to provide the relevant context.
PSD2: FCA confirms expected timing for UK consultations
At a liaison group meeting held on 1 December 2016, the Financial Conduct Authority discussed its provisional PSD2 consultation timing and industry readiness with various stakeholders. The FCA publishes its minutes on the related website but this article provides a summary of the key points discussed.
Project Innovate: FCA announces successful sandbox firms
On 7 November 2016, the FCA announced that 18 firms had been successful in their applications to begin testing in the first cohort of the regulatory sandbox. This article recaps the aims of the regulatory sandbox, provides an overview of the range of firms successful in cohort one and details how firms can apply to be part of the FCA’s second sandbox cohort.
French regulatory updates
At the end of 2016, France implemented a number of changes and new initiatives that will affect participants within the payments industry. This article by Lise Breteau, partner in our Paris office, provides a summary on, amongst others things, changes to e-money limits, the implementation of both the Fourth Money Laundering Directive and the Payment Accounts Directive.
Introduction of the FCA’s new annual financial crime report
On 11 November 2016, the FCA published the template for its new financial crime report, together with a data guide, both of which had been detailed in a policy statement published in July 2016. The reporting obligations take effect from 31 December 2016 and firms will have a submission period of 60 days from the year end in which to submit this information. We provide the context to, and an explanation of, the new REP-CRIM.
Regulatory Outlook: Data Protection and Privacy
In this article, Mark Taylor and Will Robertson, partners in our Commercial team, consider current issues concerning data protection and privacy including, the new General Data Protection Regulation, international data transfers and the UK Digital Economy Bill.
Competition as a means of supporting growth in the financial services sector
On 12 January 2017, the European Commission’s Competition Commissioner, Margrethe Vestager, delivered a speech on supporting growth through competition in financial markets. In this article, Zoe Hare, a senior associate in our Competition team, provides an overview of the use of state aid since the financial crisis and the role of competition and innovation to drive growth.
