Edinburgh Reforms: Key points for Payments firms

The government's Edinburgh Reforms seek to drive growth and competitiveness in the financial services sector. For payments firms there are a couple of points that will be of particular interest.

FCA rulemaking powers over payments firms

Included within the reforms is an example statutory instrument “to demonstrate how the new powers being taken forward in the [Financial Services and Markets] Bill will be used to ensure that the FCA has sufficient rulemaking powers over its retained EU payments legislation”. As explained in the accompanying policy note, this FCA Rulemaking for Payments SI seeks to remedy gaps in the FCA’s rulemaking powers that are not remedied directly by the FSM Bill. The draft SI therefore:

• removes limitations on the FCA’s power to make rules in relation to retained EU payments law,
• extends the FCA’s rulemaking powers under FSMA to payment services and e-money regulations, and
• gives the FCA rulemaking powers in relation to retained EU payments legislation.

The changes are intended to enable the FCA to be agile and responsive, responding quickly to the fast evolving payments landscape with any rules / amendments to rules that might be necessary.

Payments Account Regulations

The Payments Accounts Directive, implemented in the UK through the Payment Accounts Regulation, sets common regulatory standards to (i) improve the transparency and comparability of fees relating to payment accounts used for day-to-day payment transactions, (ii) facilitate the switching of those accounts, and (iii) to ensure access to basic bank accounts.

Following the government's post-implementation review of the PARs, it was noted that there were opportunities to reduce the regulatory burden on firms while continuing to support consumers. The Edinburgh Reforms therefore include a consultation on Information Requirements in the Payment Accounts Regulation. Closing on 17 February 2023, the consultation asks questions on, for example, the positive and negative impacts of the Fee Information Documents and Statement of Fees, and certain presentational requirements.