International & EU

 

The European Commission adopted a legislative proposal for a Payment Services Directive (PSD) in December 2005.  Political agreement between the Council and the European Parliament was reached in April 2007 and the Directive was adopted in November 2007. 

The PSD was published in the EU Official Journal in December 2007.

Broadly, the aims of the PSD are to:

  • enhance competition, efficiency and innovation in the European payments market by removing barriers to entry and ensuring fair market access; and

  • establish a set of rules on the information requirements, and the rights and obligations which would be applicable to all payment service providers and end-users in the European Union.

To achieve these aims, the PSD:

  • introduces a new tiered prudential authorisation regime according to the size of the payment services firms that are neither banks, building societies or e-money issuers.  Such firms are known as 'payment institutions'. Once authorised in one EU Member State, they will be able to passport their payment services business and operate in other member states.

  • allows smaller payment services firms operating beneath a certain threshold to be registered under the PSD instead of obtaining authorisation. Such firms will be unable to passport.

  • sets out conduct of business requirements on the information to customers and the rights and obligations of providers and customers. These requirements are applicable to payment institutions (whether authorised or registered) and banks, building societies and e-money issuers.

The anticipated PSD and PSR timeline is set out below.

 

Date

Activity

Links
Summer 2008 HM Treasury consultation on the draft Payment Services Regulations 2009 (now closed); Implementation of the PSD: a consultation on the draft legislation

FSA consultation (now closed) on:

  • Changes to the Dispute Resolution (DISP) section of the Handbook so that our complaints handling rules apply to Payment Institutions;

  • Changes to the jurisdiction of the Financial Ombudsman Service (FOS) so that it can perform the out-of-court redress function as required under Article 83

  • Changes to the Decision Procedure and Penalties Manual (DEPP) and the Enforcement Guide (EG) to explain our approach to enforcement of the PSD implementation legislation; and 

  • Any necessary consequential changes.

Implementation of the PSD - changes to the FSA Handbook

Dispute Resolution sourcebook (DISP)

Decision Procedure and Penalties Manual (DEPP)

Enforcement Guide (EG)

October 2008 We published draft guidance for firms uncertain if their activities fall within the scope of regulations. Quarterly Consultation (No.18)

We outlined our thinking on our approach to PSD fees in the annual fees consultation paper.

Regulatory fees and levies: policy proposals for 2009/10
February 2009

We opened consultation on our proposed fees policy.

 Regulatory fees and levies - Rates proposals 2009/10
The Payment Services Regulations were laid before parliament. They will be made into law on March 2nd. The Payment Services Regulations 2009
March 2009 We published our Approach Document outlining our approach to matters such as authorisation and supervision under the PSD, our finalised Perimeter Guidance and our Policy Statement resulting from our previous consultation.

The FSA’s role under the Payment Services Regulations 2009 [PDF]

Perimeter Guidance [PDF]

Implementation of the PSD - changes to the FSA Handbook Feedback on CP08/14 and final rules

1st May 2009 We will begin accepting applications for authorisation and registration.  
1st November 2009

PSD implementation legislation comes into force.