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Regulatory framework

How legislation, our decisions, rules and guidance fit together

In our Policy Statement we have set out how we intend to regulate the payments industry. 

While this will develop over time the key characteristics of our regulation are:

  • We aim to develop and protect competitive markets where possible and contribute to the creation of market conditions in which innovation thrives and service-users’ interests are protected. We will prioritise actions that will have a widespread positive impact across the market and take the approach of incentivising good outcomes rather than controlling them.
  • We will regulate only where we have clear evidence that we need to do so and where we expect the benefits of our regulation will outweigh any costs or unintended consequences. We will be proportionate in how we regulate – choosing to use broad standards or precise rules depending on the context.
  • We will take independent decisions for which we are ultimately accountable to Parliament. Those decisions will be deliberate, transparent and predictable.

We will keep our regulation under review, monitoring the extent to which it is delivering the results we expect and remains fit for purpose make adjustments to our approach if necessary.

Regulatory tools

The PSR's regulatory tools include legislation, rules issued by the PSR (called general directions and requirements), written guidance, and decisions (sometimes called specific directions and requirements).

Our rules, decisions and guidance apply to the participants of the payment systems we regulate, defined as:

  • operators of regulated payment systems
  • payment systems providers
  • infrastructure providers

Some of our powers apply more broadly. For example, our competition powers apply to all payment systems not just those designated by HM Treasury.

 

Our regulatory framework includes legislation, PSR rules, decisions and guidance.

Legislation

This includes the different legal texts that set out the PSR’s objectives, duties and powers.

General directions and requirements

These are the 'rules' that the PSR issues under FSBRA which apply to categories of industry participants.

Decisions, specific directions and requirements

The decisions that the PSR adopts which relate to individual, named industry participants.

We decide the most appropriate and proportionate way to intervene – a rule or a decision – based on the specific circumstances of the matter.  The procedures we then follow are set out in our Powers and Procedures Guidance.

Written guidance

Individual rules and decisions may include written guidance to clarify how a rule will be applied.

We have also produced guidance documents that set out how we intend to act, the expectations we have and the procedures and processes we will typically follow.