UK Financial Conduct Authority Consults on Implementing Draft Payment Services Regulations 2017

The Financial Conduct Authority has launched a consultation on changes to its rules resulting from implementation of the draft Payment Services Regulations 2017. The UK Government has separately consulted on draft Payment Services Regulations 2017 which will implement the revised Payment Services Directive into national laws and replace the existing Payment Services Regulations 2009.

PSD2 aims to make payments between Member States as secure, easy and efficient as those made within a Member State. PSD2 focuses on electronic payments and payment services within the EU, regulating new types of payment services and payment services providers, which are currently unregulated, and stimulating competition in the electronic payments market. PSD2 will repeal the current Payment Services Directive with effect from January 13, 2018. Member States must adopt, publish and apply implementing laws from that date, subject to certain exceptions and transitional measures.

The FCA is proposing a revised consolidated Approach Document setting out the approach to applying the Payment Services Regulations 2017 and the amended Electronic Money Regulations 2011. The single document will replace the existing Payment Services and E-Money Approach Documents. The FCA is also consulting on proposed revisions to existing guidance and some new guidance. These revisions are mostly as a result of feedback that the FCA received in response to the February 2016 Call for Input on the FCA's approach to the current payment services regime. In addition, the consultation paper includes proposed amendments to the FCA Handbook. Firms affected by the FCA's proposals include payment service providers, e-money issuers, banks, money remitters and merchant acquirers, and payment system operators and users of such services. The areas covered by the FCA's consultation are scope of application, conduct of business, authorization, passporting, regulatory reporting, payment service providers' access to payment account services, account information services and payment initiations services and confirmation of availability of funds.

Responses to the FCA consultation are due by June 8, 2017. The FCA intends to publish its final rules and approach in Q3 2017 and the changes will take effect from January 13, 2018, unless otherwise indicated. The proposals are based on the draft UK legislation and draft EU technical standards and guidance. If changes are made to those, the FCA will make appropriate changes when publishing its final rules and Approach Document, consulting only where necessary. The Payment Systems Regulator is consulting separately on its proposed approach to monitoring and enforcing PSD2.

View the consultation paper.

View the proposed Approach document.

View the proposed Approach document with tracked changes.

View the proposed Payment Services Regulations 2017.