The Payment Services and Electronic Money (Amendment) Regulations 2020

Insolvency Regulations24A

Sections 93(4) and 233 to 236 of the Banking Act 20094 apply to authorised electronic money institutions and small electronic money institutions with the modifications set out in Schedule 2ZA.

SCHEDULE 2ZAApplication and modification of the Banking Act 2009

Regulation 24A

1

Section 93(4) of the Banking Act 2009 (interpretation: other expressions) applies as if—

a

the reference to a bank were to an authorised electronic money institution or small electronic money institution;

b

the reference to an agreement in paragraph (a) were to a contract for electronic money issuance or payment services; and

c

in the closing words, from “for the purposes” to “the bank” were omitted.

2

Section 233 of the Banking Act 2009 (insolvency regulations) applies as if—

a

references to investment bank insolvency regulations were to electronic money institution insolvency regulations;

b

references to investment banks were to authorised electronic money institutions and small electronic money institutions;

c

references to client assets were to relevant funds;

d

in subsection (3)(c), the reference to clients were to electronic money holders and payment service users; and

e

in subsection (4)—

i

references to assets included references to money; and

ii

in paragraph (b), for “those which an institution undertook to hold for clients” there were substituted “relevant funds”.

3

Section 234 of the Banking Act 2009 (regulations: details) applies as if—

a

references to investment bank insolvency regulations were to electronic money institution insolvency regulations;

b

references to an investment bank were to an authorised electronic money institution or a small electronic money institution;

c

in subsection (2)(a), the reference to a trustee of client assets were to a trustee in respect of relevant funds;

d

in subsection (6)—

i

references to assets included references to money;

ii

for sub-paragraphs (a) and (b) there were substituted—

a

establishing a mechanism for determining which assets are held in an asset pool;

b

establishing a mechanism for determining that assets are to be, or not to be, treated as part of an asset pool;

ba

establishing a mechanism for determining whether an asset pool is sufficient to satisfy all the claims of the electronic money holders or payment service users in question;

bb

for steps to be taken by the administrator, if it is determined that an asset pool is not sufficient to satisfy all the claims of the electronic money holders or payment service users in question;

bc

about the constitution of an asset pool;

iii

in paragraphs (c) and (f), the references to client assets were to an asset pool; and

iv

in paragraph (e), “financial” were omitted; and

e

in subsection (7)(a), the reference to client assets were to relevant funds.

4

Section 235 of the Banking Act 2009 (regulations: procedure) applies as if—

a

references to investment bank insolvency regulations were to electronic money institution insolvency regulations; and

b

subsections (4), (5) and (6) were omitted.

5

Section 236 of the Banking Act 2009 (review) applies as if the reference to investment bank insolvency regulations were to electronic money institution insolvency regulations.

6

For the purposes of the modifications in this Schedule—

• “relevant funds” has the meaning given to it in—

  1. a

     regulation 20(1), in the case of funds of a kind mentioned in that provision, or

  2. b

     regulation 23(1) of the Payment Services Regulations 2017, as applied and modified by regulation 20(6), in the case of funds of a kind mentioned in regulation 20(6); and

• “asset pool” has the same meaning as in—

  1. a

     regulation 24(4), in relation to relevant funds under regulation 20(1), or

  2. b

     regulation 23(18) of the Payment Services Regulations 2017, in relation to relevant funds under regulation 23(1) of those Regulations, each as applied and modified by regulation 20(6).

Insolvency Regulations23A

Sections 93(4) and 233 to 236 of the Banking Act 2009 apply to authorised payment institutions and small payment institutions with the modifications set out in Schedule 3A.

SCHEDULE 3AApplication and modification of the Banking Act 2009

Regulation 23A

Insolvency regulations

1

Section 93(4) of the Banking Act 2009 (interpretation: other expressions) applies as if—

a

the reference to a bank were to an authorised payment institution or small payment institution;

b

the reference to an agreement in paragraph (a) were to a contract for payment services; and

c

in the closing words, from “for the purposes” to “the bank” were omitted.

2

Section 233 of the Banking Act 2009 (insolvency regulations) applies as if—

a

references to investment bank insolvency regulations were to payment institution insolvency regulations;

b

references to investment banks were to authorised payment institutions and small payment institutions;

c

references to client assets were to relevant funds;

d

in subsection (3)(c), the reference to clients were to payment service users; and

e

in subsection (4)—

i

references to assets included references to money; and

ii

in paragraph (b), for “those which an institution undertook to hold for clients” there were substituted “relevant funds”.

3

Section 234 of the Banking Act 2009 (regulations: details) applies as if—

a

references to investment bank insolvency regulations were to payment institution insolvency regulations;

b

references to an investment bank were to an authorised payment institution or a small payment institution;

c

in subsection (2)(a), the reference to a trustee of client assets were to a trustee in respect of relevant funds;

d

in subsection (6)—

i

references to assets included references to money;

ii

for paragraphs (a) and (b) there were substituted—

a

establishing a mechanism for determining which assets are held in the asset pool;

b

establishing a mechanism for determining that assets are to be, or not to be, treated as part of the asset pool;

ba

establishing a mechanism for determining whether the asset pool is sufficient to satisfy all the claims of the payment service users in question;

bb

for steps to be taken by the administrator, if it is determined that the asset pool is not sufficient to satisfy all the claims of the payment service users in question;

bc

about the constitution of the asset pool;

iii

in paragraphs (c) and (f), the references to client assets were to the asset pool; and

iv

in paragraph (e), “financial” were omitted; and

e

in subsection (7)(a), the reference to client assets were to relevant funds.

4

Section 235 of the Banking Act 2009 (regulations: procedure) applies as if—

a

references to investment bank insolvency regulations were to payment institution insolvency regulations; and

b

subsections (4), (5) and (6) were omitted.

5

Section 236 of the Banking Act 2009 (review) applies as if the reference to investment bank insolvency regulations were to payment institution insolvency regulations.

6

For the purposes of the modifications in this Schedule—

• “relevant funds” has the meaning given to it in regulation 23(1) of these Regulations, and

• “asset pool” has the meaning given to it in regulation 23(18) of these Regulations.