Latest legislative changes
The Small Business, Enterprise and Employment Act received Royal Assent on 26 March 2015. The Act takes forward a number of government commitments on small businesses and contains three provisions that relate to payment systems:
Section 13 makes provision for ‘cheque imaging’. This allows for cheques to be paid electronically, through presenting an electronic image (of a cheque) instead of the cheque itself. Many other countries including the US, China, India, France and a number of other European countries already operate a cheque imaging process. The use of cheque imaging is intended to enable more open access to the arrangements for processing cheques and a faster and better service for users. The traditional methods for paying in physical cheques will be preserved
Section 14 amends section 108 of the Financial Services (Banking Reform) Act 2013 (FSBRA) to give the PSR the ability to use its powers to enable firms to gain direct access to payment systems that are designated under the EU Settlement Finality Directive.
Section 14 also amends section 58 of the FSBRA to give the PSR the power to require disposal of all or part of an interest in an operator of a regulated payment system or of an infrastructure provider to a designated payment systems operator.
HM Treasury has recently designated eight payment systems to be regulated by the PSR for the purposes of Part 5 of the FSBRA – six interbank systems and two card payment systems, as follows:
• Cheque & Credit
• Faster Payments Scheme
• Northern Ireland Cheque Clearing
• Visa Europe
The PSR concurrent competition functions have now all come into force
The Financial Services (Banking Reform) Act 2013 (Commencement No 4) Order 2014 brought into force on 1 April 2014 the following provisions of FSBRA relating to the competition functions given to the new PSR concurrently with the Competition & Markets Authority:
• Section 59 (the PSR's functions under Part 4 of the Enterprise Act 2002);
• Section 60(1),(2),(3) and (7) (restrictions on the exercise of functions under Part 4 of the Enterprise Act 2002);
• Section 63 (provision of information and assistance to a CMA group);
• Section 64 (function of keeping markets under review);
• Section 65 (exclusion of general duties);
• Section 66 (concurrent competition powers: supplementary provision); and
• Section 67(3), (4) and (5) (amendments relating to the PSR's competition powers).
The Financial Services (Banking Reform) Act 2013 (Commencement No. 6) Order 2014 has brought into force the remaining provisions of the FSBRA relating to the competition functions conferred on the PSR (established under this Act) and the Financial Conduct Authority (established under the Financial Services and Markets Act 2000 (c. 8)) concurrently with the Competition & Markets Authority.
HM Treasury has recently made changes to the Payment Services Regulations 2009, transferring certain supervisory and enforcement functions from the Competition & Markets Authority (CMA) to the PSR.
These Regulations amend the Payment Services Regulations 2009 which implements the Payment Services Directive. These Regulations transfer functions of conducting investigations into, and enforcing, compliance with the prohibition on restrictive rules on access to payment systems under regulation 97 of the Payment Service Regulations 2009 from the CMA to the PSR.
These Regulations also amend the Payment Services Regulations 2009 such that financial penalties received by the PSR under regulation 105 of those Regulations are to be treated as penalties received by the PSR under section 73 of FSBRA.
The Payment to Treasury of Penalties (Enforcement Costs of the Payment Systems Regulator) Order 2015
This Order relates to paragraph 10 of Schedule 4 to FSBRA which requires the PSR to pay to the Treasury the amounts it receives by way of penalties imposed under section 73 of FSBRA.
The PSR must make the payment after deducting its enforcement costs. This Order supplements the definition of the PSR’s enforcement costs in paragraph 10 of Schedule 4 to FSBRA.
Disclosure of information
HM Treasury has recently made a number of regulations on the disclosure of certain information by and to the PSR, as follows:
The Financial Services (Banking Reform) Act 2013 (Disclosure of Confidential Information) Regulations 2014
These regulations specify the circumstances in which confidential information collected under the PSR’s regime may be disclosed.
The Financial Services and Markets Act 2000 (Disclosure of Confidential Information) (Amendment) Regulations 2014
These regulations add the Payment Systems Regulator as a body to which and by which confidential information may be disclosed under the Financial Services and Markets Act 2000.
The Banking Act 2009 (Inter-Bank Payment Systems) (Disclosure and Publication of Specified Information) (Amendment) Regulations 2015
These regulations amend the Banking Act 2009 (Inter-Bank Payment Systems) (Disclosure and Publication of Specified Information) Regulations 2010. The amendment enables the Bank of England to disclose to the PSR information it has obtained in connection with its oversight of interbank payment systems.