FCA advises on Payment Accounts Regulations

The FCA today published PS16/20: Payment Accounts Regulations 2015 – feedback on CP16/7, final Handbook changes and finalised guidance. In this Policy Statement the FCA summarises the feedback it received to Consultation Paper 16/7: Payment Accounts Regulations 2015 – draft Handbook changes and draft guidance. The regulator also published the final Handbook changes and the finalised guidance.

The Payment Accounts Directive (PAD) has been implemented in the UK by means of the Payment Accounts Regulations (PARs). The provisions on switching, payment accounts with basic features (basic bank accounts), and packaged accounts take effect on 18 September 2016. The PARs require some changes to be made to our Handbook before this date.

In CP16/7, the FCA sought stakeholders’ views of proposed Handbook amendments and also consulted on proposed non-Handbook guidance to assist payment service providers with the implementation of certain aspects of the PARs.

In summary, the FCA proposed to:

  • issue guidance on the definition of a ‘payment account’ under the PARs
  • issue guidance on the implementation of the provisions on packaged accounts
  • introduce new regulatory reporting requirements in relation to switching and payment accounts with basic features
  • make minor Handbook changes in order to take account of the provisions in the PARs on packaged accounts and switching
  • update our Decision Procedures and Penalties Manual (DEPP) and Enforcement Guide (EG) to reflect the powers of enforcement we have been given under the PARs

The regulator received 11 responses to the consultation. Respondents broadly agreed with the FCA’s overall approach and with its proposals. The feedback received has helped the regulator to improve the clarity of its guidance and to ensure that payment service providers have more certainty regarding the new reporting requirements.

Besides the matters on which the FCA consulted, several stakeholders suggested that the FCA should also make rules or provide guidance on additional issues arising from the PARs.

In this Policy Statement the FCA summarise the feedback and respond to the issues raised. The final Handbook changes are in Appendix 1 of the document. The finalised guidance is in Appendices 2 and 3.

This policy statement will primarily interest:

  • banks
  • building societies
  • e-money institutions
  • other providers of payment accounts, such as payment institutions
  • trade bodies representing providers of payment accounts

It may also be of interest to organisations representing consumers.

Payment service providers that offer, or are planning to offer, payment accounts within the meaning of the PARs should read the Handbook changes and finalised guidance.

PSPs should pay particular attention to the new reporting requirements, and act to make the necessary changes to enable them to comply from 18 September 2016.

The FCA statement together with related information is available here.

Lavanya Rathnam

Lavanya Rathnam is an experienced technology, finance, and compliance writer. She combines her keen understanding of regulatory frameworks and industry best practices with exemplary writing skills to communicate complex concepts of Governance, Risk, and Compliance (GRC) in clear and accessible language. Lavanya specializes in creating informative and engaging content that educates and empowers readers to make informed decisions. She also works with different companies in the Web 3.0, blockchain, fintech, and EV industries to assess their products’ compliance with evolving regulations and standards.

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