Shearman & Sterling LLP | Financial Regulatory Developments Focus | UK Post-Brexit Legislation Published to Onshore the EU Payment Accounts Directive for Brexit
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  • UK Post-Brexit Legislation Published to Onshore the EU Payment Accounts Directive for Brexit
    HM Treasury has published a draft of the Payment Accounts (Amendment) (EU Exit) Regulations 2018, along with explanatory information.

    The draft Regulations will amend the U.K. Payment Accounts Regulations 2015, which implemented the EU Payment Accounts Directive in the U.K., to remove references to EU institutions and to remove requirements which were intended to improve the functioning of the EU's internal market.

    The draft Regulations will affect all Payments Service Providers that offer payment accounts, and, in particular, the U.K.'s nine designated providers of basic bank accounts. Consumers of payment accounts will also be affected, in particular those who hold basic bank accounts. HM Treasury states that it expects the changes for payment account providers and consumers to be minimal.

    Among other things, the draft Regulations:
    • transfer responsibility from the European Banking Authority for Implementing Technical Standards on the documents that set out fees and charges to the U.K. Financial Conduct Authority;
    • remove requirements for HM Treasury to report to the EU Commission or for the FCA to review the linked services list (i.e., the U.K.'s list of the most representative services linked to U.K. payment accounts) in line with revisions made by the EBA to the EU standardized terminology; and
    • remove the requirement on U.K. payment account providers to facilitate cross-border opening of accounts, so that U.K. payment account providers will not be obliged (but will have discretion) to continue to offer basic bank accounts to EU residents after Brexit. The U.K.'s nine designated providers of basic bank accounts will also have discretion whether to offer cash withdrawal or payment transactions either outside the U.K. or in a currency other than sterling on any basic bank account (including those held by U.K. residents).

    HM Treasury intends to lay the Draft Regulations before Parliament in the autumn.

    View the draft Regulations.

    View the explanatory information.

    View the linked services list.

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