The Financial Services and Markets Act 2000 (Excluded Activities and Prohibitions) Order 2014

Prohibitions: inter-bank payment systems

13.—(1) A ring-fenced body (“A”) is prohibited from entering into any transaction enabling it to use services provided through an inter-bank payment system unless—

(a) A is a direct participant in the system, or

(b) where A is not a direct participant in the system, at least one of the conditions set out in paragraph (2) is satisfied.

(2) The conditions set out in this paragraph are—

(a) the intermediary through which A accesses the services provided by the inter-bank payment system is another ring-fenced body which—

(i) is a direct participant in that payment system, and

(ii) is a member of the same group as A;

(b) A is not eligible to become a direct participant in the inter-bank payment system concerned under the rules governing that payment system;

(c) should the intermediary through which A accesses the services of the inter-bank payment system concerned cease to be able to provide access to those services, A would be able to make the payments it proposes to make through that inter-bank payment system—

(i) through another intermediary, or

(ii) through another inter-bank payment system or by other means; or

(d) the PRA has, following an application made by A in accordance with paragraph (3), granted permission in accordance with paragraph (4) for A to access the services provided by the inter-bank payment system in question through the intermediary proposed by A.

(3) An application by A for permission under paragraph (2)(d) must be made in such manner and accompanied by such information as the PRA may direct.

(4) The PRA may only grant permission under paragraph (2)(d)—

(a) where it considers that the ring-fenced body needs to be able to access the services provided by the inter-bank payment system in question due to exceptional circumstances; and

(b) after it has published a statement under paragraph (9).

(5) The PRA shall keep any permission granted under paragraph (2)(d) under review, and shall withdraw that permission if it considers that the exceptional circumstances in question no longer apply, after following the procedure set out in paragraphs (6) and (7).

(6) If the PRA proposes—

(a) to refuse an application for permission under paragraph (2)(d), or

(b) to withdraw a permission granted under paragraph (2)(d),

it must give the ring-fenced body a warning notice, stating why it considers that the exceptional circumstances do not apply (if sub-paragraph (a) applies), or no longer apply (if sub-paragraph (b) applies).

(7) If the PRA has decided, after consideration of any representations received in writing from the ring-fenced body in response to the warning notice—

(a) to refuse an application for permission under paragraph (2)(d), or

(b) to withdraw permission granted under paragraph (2)(d),

it must give the ring-fenced body a decision notice.

(8) If the PRA decides—

(a) to refuse an application for permission under paragraph (2)(d), or

(b) to withdraw permission granted under paragraph (2)(d),

the ring-fenced body may refer the matter to the Tribunal, and Part 9 of the Act applies to any proceedings before the Tribunal in relation to the matter.

(9) The PRA must, before 1st July 2019, publish a statement containing guidance on what is meant by “exceptional circumstances” for the purposes of granting a permission under paragraph (2)(d) in a way appearing to the PRA to be best calculated to bring it to the attention of the public.

(10) Part 26 of the Act applies to any notices given by the PRA under this article.

(11) In this article—

“direct participant” means an institution which is able to provide services for the purpose of enabling the transfer of funds using the inter-bank payment system as a result of an arrangement made between the institution and the operator of the payment system;

“inter-bank payment system” has the meaning given by section 182 of the Banking Act 2009(1), but does not include—

(a)

a payment system the operator of which is—

(i)

a recognised clearing house within the meaning of section 285(1) of the Act(2), or

(ii)

the operator of a relevant system approved by the Bank of England under regulation 5 of the Uncertificated Securities Regulations 2001(3);

(b)

arrangements made by A with another credit institution for correspondent banking;

(c)

arrangements made to facilitate the physical transfer of money between financial institutions, including the Note Circulation Scheme set up by the Bank of England.

(1)

2009 c.1.

(2)

Section 285 has been amended by the Financial Services Act 2012 (c.21), section 28 and S.I. 2013/504.

(3)

S.I. 2001/3755. Regulation 5 was amended by S.I. 2013/632.