The Electronic Money, Payment Services and Payment Systems (Amendment and Transitional Provisions) (EU Exit) Regulations 2018 No. 1201

Statutory Instruments

2018 No. 1201

Exiting The European Union

Financial Services And Markets

The Electronic Money, Payment Services and Payment Systems (Amendment and Transitional Provisions) (EU Exit) Regulations 2018

Made

19th November 2018

Coming into force in accordance with regulation 1(2) and (3)

M1 The Treasury make these Regulations in exercise of the powers conferred by section 8(1) of the European Union (Withdrawal) Act 2018 .

In accordance with paragraph 1(1) of Schedule 7 to that Act a draft of this instrument has been laid before Parliament and approved by a resolution of each House of Parliament.

Modifications etc. (not altering text)

C1 Regulations: power to modify conferred (11.7.2023) by Financial Services and Markets Act 2023 (c. 29), ss. 3, 86(3), Sch. 1 Pt. 2; S.I. 2023/779, reg. 2(d)

Marginal Citations

M1 2018 c. 16.

Citation and commencement U.K.

1.—(1) These Regulations may be cited as the Electronic Money, Payment Services and Payment Systems (Amendment and Transitional Provisions) (EU Exit) Regulations 2018.

(2) Except as provided by paragraph (3), these regulations come into force on the day after the day on which they are made.

(3) Regulations 2 and 3(1) and Schedules 1 and 2 come into force on exit day.

Amendments of primary legislation U.K.

2.  Schedule 1 contains amendments of primary legislation.

Commencement Information

I1 Reg. 2 in force at 31.12.2020 on IP completion day (in accordance with 2020 c. 1, Sch. 5 para. 1(1)), see reg. 1(3)

Amendments of subordinate legislation and related transitional provisions U.K.

3.—(1) Schedule 2 contains amendments of subordinate legislation.

(2) Schedule 3 contains transitional provisions related to those amendments.

Commencement Information

I2 Reg. 3(2) in force at 20.11.2018, see reg. 1(2)

I3 Reg. 3(1) in force at 31.12.2020 on IP completion day (in accordance with 2020 c. 1, Sch. 5 para. 1(1)), see reg. 1(3)

Saving provision relating to tax U.K.

4.  For the purposes of an enactment relating to taxation—

(a) the provision made by these Regulations is to be treated as not having been made, and

(b) where, by virtue of these Regulations, a person ceases to be a person of a particular description, the person is to be treated as continuing to be a person of that description.

Rebecca Harris

Paul Maynard

Two of the Lords Commissioners of Her Majesty's Treasury

Regulation 2

SCHEDULE 1 U.K. Amendments of primary legislation

1.  In section 204 of the Banking Act 2009 M2 (information), omit subsection (4)(d). U.K.

Commencement Information

I4 Sch. 1 para. 1 in force at 31.12.2020 on IP completion day (in accordance with 2020 c. 1, Sch. 5 para. 1(1)), see reg. 1(3)

Marginal Citations

M2 2009 c. 1.

2.—(1) The Financial Services (Banking Reform) Act 2013 M3 is amended as follows. U.K.

(2) In section 100 (power of Bank of England to require Payment Systems Regulator to refrain from specified action), in subsection (7), omit “EU obligation or any other”.

(3) In section 101 (power of FCA to require Payment Systems Regulator to refrain from specified action), in subsection (7), omit “EU obligation or any other”.

(4) In section 102 (power of PRA to require Payment Systems Regulator to refrain from specified action), in subsection (7), omit “EU obligation or any other”.

Commencement Information

I5 Sch. 1 para. 2 in force at 31.12.2020 on IP completion day (in accordance with 2020 c. 1, Sch. 5 para. 1(1)), see reg. 1(3)

Marginal Citations

M3 2013 c. 33.

Regulation 3(1)

SCHEDULE 2 U.K. Amendments of subordinate legislation

PART 1 U.K. Amendments of Electronic Money Regulations 2011

1.  The Electronic Money Regulations 2011 M4  are amended as follows. U.K.

Commencement Information

I6 Sch. 2 para. 1 in force at 31.12.2020 on IP completion day (in accordance with 2020 c. 1, Sch. 5 para. 1(1)), see reg. 1(3)

Marginal Citations

M4 S.I. 2011/99.

2.—(1) Regulation 2 (interpretation) is amended as follows. U.K.

(2) In paragraph (1)—

(a) omit the definition of “the capital requirements directive”;

(b) in the definition of “credit institution”—

(i) for “within the EEA” substitute “ in the United Kingdom ”;

(ii) for the words from “outside the EEA” to the end substitute “ outside the United Kingdom ”;

(c) omit the definitions of—

“the EEA”;

“EEA agent”;

“EEA authorised electronic money institution”;

“EEA branch”;

(d) omit the definition of “the electronic money directive”;

(e) in the definition of “electronic money issuer”—

(i) omit paragraph (c);

(ii) for paragraph (f) substitute—

“(f) the Bank of England, when not acting in its capacity as a monetary authority or other public authority;”;

(f) omit the definitions of—

“European Banking Authority”;

“home state competent authority”;

“host state competent authority”;

(g) omit the definition of “the money laundering directive”;

(h) omit the definition of “passport right”;

(i) omit the definition of “the payment services directive”;

(j) in the definition of “payment transaction”, for “Article 4(5) of the payment services directive” substitute “ regulation 2(1) of the Payment Services Regulations 2017 M5 ”.

(3) Omit paragraph (3).

Commencement Information

I7 Sch. 2 para. 2 in force at 31.12.2020 on IP completion day (in accordance with 2020 c. 1, Sch. 5 para. 1(1)), see reg. 1(3)

Marginal Citations

M5 S.I. 2017/752.

3.  In regulation 3 (electronic money: exclusions), in paragraph (a)(iv), for “a single EEA State” substitute “ the United Kingdom ”. U.K.

Commencement Information

I8 Sch. 2 para. 3 in force at 31.12.2020 on IP completion day (in accordance with 2020 c. 1, Sch. 5 para. 1(1)), see reg. 1(3)

4.—(1) Regulation 4 (the register of certain electronic money issuers) is amended as follows. U.K.

(2) In paragraph (1)(a), omit “and their EEA branches”.

(3) In paragraph (2), omit “(c),”.

(4) Omit paragraph (7).

Commencement Information

I9 Sch. 2 para. 4 in force at 31.12.2020 on IP completion day (in accordance with 2020 c. 1, Sch. 5 para. 1(1)), see reg. 1(3)

5.—(1) Regulation 6 (conditions for authorisation) is amended as follows. U.K.

(2) In paragraph (4)(b), for “EEA” substituted “ United Kingdom ”.

(3) In paragraph (8)(b), for “not an EEA state” substitute “ outside the United Kingdom ”.

Commencement Information

I10 Sch. 2 para. 5 in force at 31.12.2020 on IP completion day (in accordance with 2020 c. 1, Sch. 5 para. 1(1)), see reg. 1(3)

6.  In the heading to Part 3, omit “and Passporting”. U.K.

Commencement Information

I11 Sch. 2 para. 6 in force at 31.12.2020 on IP completion day (in accordance with 2020 c. 1, Sch. 5 para. 1(1)), see reg. 1(3)

7.—(1) Regulation 21 (safeguarding option 1) is amended as follows. U.K.

(2) In paragraph (7)—

(a) in the definition of “authorised credit institution”, for the words from “or otherwise authorised” to “other than” substitute “ or an approved foreign credit institution (see paragraph (8)), but does not include ”;

(b) in the definition of “authorised custodian”, omit the words from “or authorised” to the end.

(3) After paragraph (7) insert—

“(8) In paragraph (7), “approved foreign credit institution” means—

(a) the central bank of a State that is a member of the Organisation for Economic Co-operation and Development (“an OECD state”),

(b) a credit institution that is supervised by the central bank or other banking regulator of an OECD state,

(c) any credit institution that—

(i) is subject to regulation by the banking regulator of a State that is not an OECD state,

(ii) is required by the law of the country or territory in which it is established to provide audited accounts,

(iii) has minimum net assets of £5 million (or its equivalent in any other currency at the relevant time),

(iv) has a surplus of revenue over expenditure for the last two financial years, and

(v) has an annual report which is not materially qualified.”

Commencement Information

I12 Sch. 2 para. 7 in force at 31.12.2020 on IP completion day (in accordance with 2020 c. 1, Sch. 5 para. 1(1)), see reg. 1(3)

8.  In regulation 22 (safeguarding option 2), in paragraph (3), in the definition of “authorised insurer”, omit the words from “or otherwise authorised” to “that Directive”. U.K.

Commencement Information

I13 Sch. 2 para. 8 in force at 31.12.2020 on IP completion day (in accordance with 2020 c. 1, Sch. 5 para. 1(1)), see reg. 1(3)

9.—(1) Regulation 25 (accounting and statutory audit) is amended as follows. U.K.

(2) In paragraph (2), for the words from “statutory auditors” to the end substitute “ statutory auditor ”.

(3) In paragraph (3), omit “or audit firm”.

(4) At the end insert—

“(6) In this regulation “statutory auditor” has the same meaning as in Part 42 of the Companies Act 2006 M6 (see section 1210 of that Act).”

Commencement Information

I14 Sch. 2 para. 9 in force at 31.12.2020 on IP completion day (in accordance with 2020 c. 1, Sch. 5 para. 1(1)), see reg. 1(3)

Marginal Citations

M6 2006 c. 46.

10.  Omit regulation 28 (notice of intention), regulation 29 (decision following notice of intention), regulation 29A (notice of intention from an EEA authorised payment institution) and regulation 30 (supervision of firms exercising passport rights). U.K.

Commencement Information

I15 Sch. 2 para. 10 in force at 31.12.2020 on IP completion day (in accordance with 2020 c. 1, Sch. 5 para. 1(1)), see reg. 1(3)

11.—(1) Regulation 32 (additional activities) is amended as follows. U.K.

(2) In paragraph (1)(d), omit “European Union or”.

(3) In paragraph (4), for “EEA” substitute “ United Kingdom ”.

Commencement Information

I16 Sch. 2 para. 11 in force at 31.12.2020 on IP completion day (in accordance with 2020 c. 1, Sch. 5 para. 1(1)), see reg. 1(3)

12.  In regulation 33 (use of distributors and agents), omit paragraph (3). U.K.

Commencement Information

I17 Sch. 2 para. 12 in force at 31.12.2020 on IP completion day (in accordance with 2020 c. 1, Sch. 5 para. 1(1)), see reg. 1(3)

13.—(1) Regulation 34 (requirement for agents to be registered) is amended as follows. U.K.

(2) Omit paragraph (2).

(3) In paragraph (3)(a)—

(a) in paragraph (ii), for the words from “by the agent” to the end substitute “ by the agent to comply with the Money Laundering, Terrorist Financing and Transfer of Funds (Information on the Payer) Regulations 2017 M7 ”;

(b) in paragraph (iii), omit “or an EEA authorised electronic money institution”.

(4) Omit paragraph (5A).

(5) In paragraph (6)(c)(i), for the words from “money laundering directive” to “Regulations 2017)” substitute “ Money Laundering, Terrorist Financing and Transfer of Funds (Information on the Payer) Regulations 2017 ”.

(6) Omit paragraph (10A).

(7) In paragraph (10B), for the words from “and (10A)” to the end substitute “ within a period of two months beginning on the date on which the Authority received the completed application ”.

(8) Omit paragraph (12A).

Commencement Information

I18 Sch. 2 para. 13 in force at 31.12.2020 on IP completion day (in accordance with 2020 c. 1, Sch. 5 para. 1(1)), see reg. 1(3)

Marginal Citations

M7 S.I. 2017/692.

14.  In regulation 37 (duty to notify change in circumstance), in paragraph (1)(a), for the words from “institution” to the end substitute “ institution, its fulfilment of any of the conditions set out in regulation 6(4) to (8) or the requirement in regulation 19(1) to maintain own funds ”. U.K.

Commencement Information

I19 Sch. 2 para. 14 in force at 31.12.2020 on IP completion day (in accordance with 2020 c. 1, Sch. 5 para. 1(1)), see reg. 1(3)

15.  Omit regulation 59A (credit agreements). U.K.

Commencement Information

I20 Sch. 2 para. 15 in force at 31.12.2020 on IP completion day (in accordance with 2020 c. 1, Sch. 5 para. 1(1)), see reg. 1(3)

16.  In regulation 63 (prohibition on issuing electronic money by persons other than electronic money issuers), in paragraph (1)— U.K.

(a) omit sub-paragraph (c);

(b) in sub-paragraph (d), omit the words from “or exercising” to “EEA firms)”;

(c) in sub-paragraph (f), omit the words from “the European” to the end.

Commencement Information

I21 Sch. 2 para. 16 in force at 31.12.2020 on IP completion day (in accordance with 2020 c. 1, Sch. 5 para. 1(1)), see reg. 1(3)

17.—(1) Regulation 71 (duty to co-operate and exchange information) is amended as follows. U.K.

(2) In paragraph (1)—

(a) omit sub-paragraph (a);

(b) for sub-paragraphs (b) to (d) substitute—

“(b) the Bank of England; and

(c) any other public authorities which exercise functions that are relevant to electronic money issuers,”;

(c) for the words from “under the electronic” to the end substitute “ under these Regulations and other relevant legislation ”.

(3) In paragraph (2)—

(a) in sub-paragraph (a), for “(1)(a), (c) and (d)” substitute “ (1)(c) ”;

(b) for sub-paragraph (b) substitute—

“(b) the Bank of England when acting in its capacity as monetary and oversight authority;”;

(c) for the words from “under the electronic” to the end substitute “ under these Regulations and other relevant legislation ”.

(4) Omit paragraph (3).

Commencement Information

I22 Sch. 2 para. 17 in force at 31.12.2020 on IP completion day (in accordance with 2020 c. 1, Sch. 5 para. 1(1)), see reg. 1(3)

18.  Omit regulations 74 to 78A (transitional provisions). U.K.

Commencement Information

I23 Sch. 2 para. 18 in force at 31.12.2020 on IP completion day (in accordance with 2020 c. 1, Sch. 5 para. 1(1)), see reg. 1(3)

19.  In Schedule 1 (information to be included in or with an application for authorisation), in paragraph 5E(b)(iii), omit the words from “taking into” to the end. U.K.

Commencement Information

I24 Sch. 2 para. 19 in force at 31.12.2020 on IP completion day (in accordance with 2020 c. 1, Sch. 5 para. 1(1)), see reg. 1(3)

20.  Omit Schedule 2A (credit agreements). U.K.

Commencement Information

I25 Sch. 2 para. 20 in force at 31.12.2020 on IP completion day (in accordance with 2020 c. 1, Sch. 5 para. 1(1)), see reg. 1(3)

21.—(1) Schedule 3 (application and modification of legislation) is amended as follows. U.K.

(2) In paragraph 2A (Authority rules), in sub-paragraph (1)—

(a) in paragraph (a), for “, small electronic money institutions and EEA authorised electronic money institutions” substitute “ and small electronic money institutions ”;

(b) omit paragraph (c).

(3) In paragraph 3 (information gathering and investigations)—

(a) in paragraphs (a)(i), (b)(i), (ba), (c)(i)(bb) and (cc) and (ii)(aa), (bb) and (cc), in each of the modifications of sections 165, 166, 166A and 167 of the Financial Services and Markets Act 2000 M8 referring to the definition of “electronic money issuer” in regulation 2(1) of the Electronic Money Regulations 2011, omit “(c),”;

(b) in paragraph (d), in the modification of section 168(1) of the Financial Services and Markets Act 2000, omit paragraphs (ac) and (ad);

(c) in paragraph (k), in the modification of section 176(3)(a) of the Financial Services and Markets Act 2000, omit “(c),”.

(4) Omit paragraph 4A (incoming firms: intervention by the Authority).

Commencement Information

I26 Sch. 2 para. 21 in force at 31.12.2020 on IP completion day (in accordance with 2020 c. 1, Sch. 5 para. 1(1)), see reg. 1(3)

Marginal Citations

M8 2000 c. 8.

22.—(1) Schedule 5 (Gibraltar) is amended as follows. U.K.

(2) In the heading before paragraph 1, for “deemed passport rights” substitute “ market access rights ”.

(3) In paragraph 1—

(a) in sub-paragraph (1)(b), after “in accordance with” insert “ Gibraltar legislation which implemented ”;

(b) after sub-paragraph (1) insert—

“(1A) Such a firm is referred to in the following provisions of this Schedule as a Gibraltar-based firm.”;

(c) for sub-paragraphs (2) and (3) substitute—

“(2) A Gibraltar-based firm is to be treated as having an entitlement, corresponding to the passport right deriving from the electronic money directive that such a firm had immediately before [F1 IP completion day], to establish a branch or provide services in the United Kingdom.

(2A) Despite their amendment or revocation by the Electronic Money, Payment Services and Payment Systems (Amendment and Transitional Provisions) (EU Exit) Regulations 2018, the provisions of these Regulations listed in sub-paragraph (2B), as they had effect immediately before [F1 IP completion day], continue to apply for the purposes of this paragraph.

(2B) The provisions referred to in sub-paragraph (2A) are as follows—

(a) in regulation 2 (interpretation), in paragraph (1), paragraph (c) of the definition of “electronic money issuer”;

(b) in regulation 4 (the register of electronic money issuers), in paragraph (2), the reference to paragraph (c) of the definition of electronic money issuer;

(d) in regulation 21 (safeguarding option 1), paragraph (7);

(e) in regulation 22 (safeguarding option 2), paragraph (3);

(f) regulation 25 (accounting and statutory audit);

(g) regulations 29A and 30 (passporting);

(h) in regulation 34 (requirement for agents to be registered), paragraph (3)(a)(iii);

(i) regulation 59A and Schedule 2A (credit agreements);

(j) regulation 63 (prohibition on issuing electronic money by persons other than electronic money issuers);

(k) in regulation 71 (duty to co-operate and exchange information), paragraph (1);

(l) in Schedule 3 (application and modification of legislation), paragraphs 2A and 3.

(3) In those provisions as applying for the purposes of this paragraph—

(a) references to an “EEA authorised electronic money institution” are to be read as references to the firm;

(b) references to the home state competent authority are to be read as references to the Gibraltar Financial Services Commission;

(c) references to a “passport right” are to be read as references to the entitlement mentioned in sub-paragraph (2);

(d) references to the authorisation of any person as a credit institution, custodian or insurer in accordance with a directive are to be read as a reference to authorisation in accordance with Gibraltar legislation which implemented the directive;

(e) references to a person's rights or entitlements are to be read as references to the rights or entitlements the person would have, if the person's rights or entitlements were being determined immediately before [F1 IP completion day].”

(4) In the heading before paragraph 2, for “deemed passport rights” substitute “market access rights.

(5) In paragraph 2—

(a) in sub-paragraph (1) for “its passport right,” substitute “ the passport right that such a firm had immediately before [F2 IP completion day],”;

(b) after sub-paragraph (1) insert—

“(1A) Despite their amendment or revocation by the Electronic Money, Payment Services and Payment Systems (Amendment and Transitional Provisions) (EU Exit) Regulations 2018, the provisions of these Regulations listed in sub-paragraph (1B), as they had effect immediately before [F3 IP completion day], continue to apply for the purposes of this paragraph.

(1B) The provisions referred to in sub-paragraph (1A) are as follows—

(a) regulations 28 to 30 (passporting);

(b) in regulation 33 (use of distributors and agents), paragraph (3);

(c) in regulation 34 (requirement for agents to be registered), paragraphs (2), (3), (5A), (10A), (10B) and (12A);

(d) in regulation 37 (duty to notify change in circumstance), paragraph (1)(a);

(c) regulation 71 (duty to co-operate).”;

(c) for sub-paragraph (2) substitute—

“(2) In relation to an authorised electronic money institution which establishes a branch or provides services in Gibraltar, those provisions are to be read as if—

(a) references to an “EEA branch” were references to such a branch;

(b) references to an “EEA State” were references to Gibraltar;

(c) references to the host state competent authority were references to the Gibraltar Financial Services Commission; and

(e) references to a “passport right” were references to the entitlement mentioned in sub-paragraph (1).”

(6) After paragraph 2 insert—

“References to Gibraltar regulator

2A.— (1) The Treasury may by regulations made by statutory instrument make such amendments of the references in paragraphs 1 and 2 to the Gibraltar Financial Services Commission, or any references previously substituted for those references, as appear to the Treasury to be appropriate in order to take account of any change in the law of Gibraltar.

(2) A statutory instrument containing regulations under sub-paragraph (1) is subject to annulment in pursuance of a resolution of either House of Parliament.”

(7) Omit paragraph 3.

Textual Amendments

F1 Words in Sch. 2 para. 22(3)(c) substituted (30.12.2020) by The Financial Services and Economic and Monetary Policy (Consequential Amendments) (EU Exit) Regulations 2020 (S.I. 2020/1301), regs. 1, 3, Sch. para. 6(a)(i)

F2 Words in Sch. 2 para. 22(5)(a) substituted (30.12.2020) by The Financial Services and Economic and Monetary Policy (Consequential Amendments) (EU Exit) Regulations 2020 (S.I. 2020/1301), regs. 1, 3, Sch. para. 6(a)(ii)

F3 Words in Sch. 2 para. 22(5)(b) substituted (30.12.2020) by The Financial Services and Economic and Monetary Policy (Consequential Amendments) (EU Exit) Regulations 2020 (S.I. 2020/1301), regs. 1, 3, Sch. para. 6(a)(iii)

Commencement Information

I27 Sch. 2 para. 22 in force at 31.12.2020 on IP completion day (in accordance with 2020 c. 1, Sch. 5 para. 1(1)), see reg. 1(3)

PART 2 U.K. Amendments of Payment Services Regulations 2017

23.  The Payment Services Regulations 2017 M9 are amended as follows. U.K.

Commencement Information

I28 Sch. 2 para. 23 in force at 31.12.2020 on IP completion day (in accordance with 2020 c. 1, Sch. 5 para. 1(1)), see reg. 1(3)

Marginal Citations

M9 S.I. 2017/752.

24.  In regulation 1 (citation, commencement and extent), in paragraph (5), for the words from “eighteen months” to the end substitute “ on 14th September 2019 ”. U.K.

Commencement Information

I29 Sch. 2 para. 24 in force at 31.12.2020 on IP completion day (in accordance with 2020 c. 1, Sch. 5 para. 1(1)), see reg. 1(3)

25.—(1) Regulation 2 (interpretation) is amended as follows. U.K.

(2) In paragraph (1)—

(a) in the definition of “branch”—

(i) at the end of paragraph (b) insert “ or ”;

(ii) omit paragraphs (d) and (e);

(iii) omit the words from “and, for the purposes of these Regulations” to the end;

(b) omit the definition of “the capital requirements directive”;

(c) omit the definitions of—

“the EEA”;

“EEA agent”;

“EEA authorised payment institution”;

“EEA branch”;

“EEA registered account information service provider”;

(d) for the definitions of “electronic communications network” and “electronic communications service” substitute—

““electronic communications network” means transmission systems and, where applicable, switching or routing equipment and other resources which permit the conveyance of signals by wire, by radio, by optical or by other electromagnetic means, including satellite networks, fixed (circuit- and packet-switched, including Internet) and mobile terrestrial networks, electricity cable systems, to the extent that they are used for the purpose of transmitting signals, networks used for radio and television broadcasting, and cable television networks, irrespective of the type of information conveyed;

“electronic communications service” means a service normally provided for remuneration which consists wholly or mainly in the conveyance of signals on electronic communications networks, including telecommunications services and transmission services in networks used for broadcasting, but exclude services providing, or exercising editorial control over, content transmitted using electronic communications networks and services; it does not include information society services, as defined in Article 1 of Directive (EU) 2015/1535 of the European Parliament and of the Council of 9 September 2015 laying down a procedure for the provision of information in the field of technical regulations and of rules on Information Society services, which do not consist wholly or mainly in the conveyance of signals on electronic communications networks;”;

(e) in the definition of “electronic money”, for “Article 2(2) of the electronic money directive” substitute “ regulation 2(1) of the Electronic Money Regulations 2011 ”;

(f) omit the definition of “the electronic money directive”;

(g) in the definition of “electronic money institution”, for “Article 2(1) of the electronic money directive” substitute “ regulation 2(1) of the Electronic Money Regulations 2011 ”;

(h) omit the definition of “European Banking Authority”;

(i) omit the definitions of “home state competent authority” and “host state competent authority”;

(j) omit the definition of “the money laundering directive”;

(k) omit the definition of “passport right”;

(l) in the definition of “payment service provider”—

(i) omit paragraphs (d) and (e);

(ii) in paragraphs (f) and (g), for “EEA”, in each place, substitute “ United Kingdom ”;

(iii) in paragraph (i), for the words from “the European” to “their” substitute “ other than when acting in its ”;

(m) after the definition of “sensitive payment data” insert—

““the SEPA regulation” means Regulation (EU) No 260/2012 of the European Parliament and of the Council of 14 March 2012 establishing technical and business requirements for credit transfers and direct debits in euro and amending Regulation (EC) No 924/2009;”.

(3) Omit paragraph (3).

Commencement Information

I30 Sch. 2 para. 25 in force at 31.12.2020 on IP completion day (in accordance with 2020 c. 1, Sch. 5 para. 1(1)), see reg. 1(3)

26.—(1) Regulation 4 (register of certain payment service providers) is amended as follows. U.K.

(2) In paragraph (1)(a), omit “and their EEA branches”.

(3) In paragraph (2), for “(d)” substitute “ (f) ”.

(4) Omit paragraph (6).

Commencement Information

I31 Sch. 2 para. 26 in force at 31.12.2020 on IP completion day (in accordance with 2020 c. 1, Sch. 5 para. 1(1)), see reg. 1(3)

27.  In regulation 6 (conditions for authorisation as a payment institution), in paragraph (9)(b) for “which is not an EEA State” substitute “ outside the United Kingdom ”. U.K.

Commencement Information

I32 Sch. 2 para. 27 in force at 31.12.2020 on IP completion day (in accordance with 2020 c. 1, Sch. 5 para. 1(1)), see reg. 1(3)

28.  In regulation 22 (capital requirements), in paragraph (2)(b)(i), for “pursuant to the capital requirements directive” substitute “ under Part 6 of the Capital Requirements Regulations 2013 M10 ”. U.K.

Commencement Information

I33 Sch. 2 para. 28 in force at 31.12.2020 on IP completion day (in accordance with 2020 c. 1, Sch. 5 para. 1(1)), see reg. 1(3)

Marginal Citations

M10 S.I. 2013/3115.

29.—(1) Regulation 23 (safeguarding requirements) is amended as follows. U.K.

(2) In paragraph (18)—

(a) in the definition of “authorised insurer”, omit the words from “or otherwise authorised” to “of that Directive”;

(b) in the definition of “authorised credit institution”, for the words from “or otherwise authorised” to “other than” substitute “ or an approved foreign credit institution (see paragraph (19)), but does not include ”;

(c) in the definition of “authorised custodian” omit the words from “or authorised” to “that Directive”.

(3) After paragraph (18) insert—

“(19) In paragraph (18), “approved foreign credit institution” means—

(a) the central bank of a State that is a member of the Organisation for Economic Co-operation and Development (“an OECD state”),

(b) a credit institution that is supervised by the central bank or other banking regulator of an OECD state,

(c) any credit institution that—

(i) is subject to regulation by the banking regulator of a State that is not an OECD state,

(ii) is required by the law of the country or territory in which it is based to provide audited accounts,

(iii) has minimum net assets of £5 million (or its equivalent in any other currency at the relevant time),

(iv) has a surplus of revenue over expenditure for the last two financial years, and

(v) has an annual report which is not materially qualified.”

Commencement Information

I34 Sch. 2 para. 29 in force at 31.12.2020 on IP completion day (in accordance with 2020 c. 1, Sch. 5 para. 1(1)), see reg. 1(3)

30.—(1) Regulation 24 (accounting and statutory audit) is amended as follows. U.K.

(2) In paragraph (2), for the words from “statutory auditors” to the end substitute “ statutory auditor ”.

(3) In paragraph (3), omit “or audit firm”.

(4) At the end insert—

“(6) In this regulation “statutory auditor” has the same meaning as in Part 42 of the Companies Act 2006 (see section 1210 of that Act).”

Commencement Information

I35 Sch. 2 para. 30 in force at 31.12.2020 on IP completion day (in accordance with 2020 c. 1, Sch. 5 para. 1(1)), see reg. 1(3)

31.  Omit regulations 26 to 30 (which relate to the exercise of passport rights in EEA States). U.K.

Commencement Information

I36 Sch. 2 para. 31 in force at 31.12.2020 on IP completion day (in accordance with 2020 c. 1, Sch. 5 para. 1(1)), see reg. 1(3)

32.—(1) Regulation 32 (additional activities) is amended as follows. U.K.

(2) In paragraph (1)(c), leave out “EU or”.

(3) In paragraph (2)—

(a) at the end of sub-paragraph (b) insert “ and ”;

(b) omit sub-paragraph (c) and the “and” immediately following it.

Commencement Information

I37 Sch. 2 para. 32 in force at 31.12.2020 on IP completion day (in accordance with 2020 c. 1, Sch. 5 para. 1(1)), see reg. 1(3)

33.—(1) Regulation 34 (use of agents) is amended as follows. U.K.

(2) Omit paragraph (2).

(3) In paragraph (3)(a)(ii), for the words from “money laundering directive” to the end substitute “ Money Laundering, Terrorist Financing and Transfer of Funds (Information on the Payer) Regulations 2017 ”.

(4) Omit paragraph (6).

(5) In paragraph (7)(c)(i), for the words from “money laundering directive” to “2017)” substitute “ Money Laundering, Terrorist Financing and Transfer of Funds (Information on the Payer) Regulations 2017 ”.

(6) Omit paragraph (10).

(7) For paragraph (11) substitute—

“(11) The FCA must give any notice required by paragraph (9) within a period of two months beginning on the date on which the FCA received the completed application.”

(8) Omit paragraph (14).

Commencement Information

I38 Sch. 2 para. 33 in force at 31.12.2020 on IP completion day (in accordance with 2020 c. 1, Sch. 5 para. 1(1)), see reg. 1(3)

34.  In regulation 37 (duty to notify change in circumstance), omit paragraph (1)(a)(ii). U.K.

Commencement Information

I39 Sch. 2 para. 34 in force at 31.12.2020 on IP completion day (in accordance with 2020 c. 1, Sch. 5 para. 1(1)), see reg. 1(3)

35.—(1) Regulation 40 (application of Part 6) is amended as follows. U.K.

(2) In paragraph (1)(b)—

(a) in paragraph (i)—

(i) for “the EEA” substitute “ the United Kingdom ”;

(ii) for “the currency of an EEA State” substitute “ sterling ”;

(b) after paragraph (i) insert—

“(ia) the payment service providers of both the payer and the payee are located within the qualifying area and the service relates to a transaction in euro executed under a payment scheme which operates across the qualifying area;”,

(c) in paragraph (ii)—

(i) for “the EEA” substitute “ the United Kingdom ”;

(ii) for “the currency of an EEA State” substitute “ sterling or euro ”;

(d) in paragraph (iii), for “EEA” substitute “ United Kingdom and the case does not fall within paragraph (ia) ”.

(3) After paragraph (1) insert—

“(1A) In paragraph (1)(b)(ia)—

(a) “payment service provider” includes any person who is a PSP as defined in Article 2(8B) of the SEPA regulation;

(b) “the qualifying area” means the area of the United Kingdom and the EEA States.”

(4) In paragraphs (2)(a) and (3)(a), for “EEA” substitute “ United Kingdom ”.

(5) In paragraph (4), omit “or EEA registered account information service providers”.

Commencement Information

I40 Sch. 2 para. 35 in force at 31.12.2020 on IP completion day (in accordance with 2020 c. 1, Sch. 5 para. 1(1)), see reg. 1(3)

36.  In regulation 60 (information requirements for account information service providers), omit “or EEA registered account information service provider”. U.K.

Commencement Information

I41 Sch. 2 para. 36 in force at 31.12.2020 on IP completion day (in accordance with 2020 c. 1, Sch. 5 para. 1(1)), see reg. 1(3)

37.—(1) Regulation 62 (provision of information leaflet) is amended as follows. U.K.

(2) Before paragraph (1) insert—

“(A1) The FCA must—

(a) produce a user-friendly electronic document listing in a clear and easily comprehensible manner the rights of consumers under these Regulations,

(b) make the document available in an easily accessible manner on its website, and

(c) inform associations of payment service providers and associations of consumers of its publication.”

(3) In paragraph (1), for the words from “European” to “directive” substitute “ FCA under paragraph (A1) ”.

(4) Omit paragraph (2).

Commencement Information

I42 Sch. 2 para. 37 in force at 31.12.2020 on IP completion day (in accordance with 2020 c. 1, Sch. 5 para. 1(1)), see reg. 1(3)

38.—(1) Regulation 63 (application of Part 7) is amended as follows. U.K.

(2) In paragraph (1)(b)—

(a) in paragraph (i)—

(i) for “the EEA” substitute “ the United Kingdom ”;

(ii) for “the currency of an EEA State” substitute “ sterling ”;

(b) after paragraph (i) insert—

“(ia) the payment service providers of both the payer and the payee are located within the qualifying area and the service relates to a transaction in euro executed under a payment scheme which operates across the qualifying area;”,

(c) in paragraph (ii)—

(i) for “the EEA” substitute “ the United Kingdom ”;

(ii) for “the currency of an EEA State” substitute “ sterling or euro ”;

(d) in paragraph (iii), for “EEA” substitute “ United Kingdom and the case does not fall within paragraph (ia) ”.

(3) After paragraph (1) insert—

“(1A) In paragraph (1)(b)(ia)—

(a) “payment service provider” includes any person who is a PSP as defined in Article 2(8B) of the SEPA regulation;

(b) “the qualifying area” means the area of the United Kingdom and the EEA States.”

(4) In paragraphs (2)(a) and (3)(a), for “EEA” substitute “ United Kingdom ”.

(5) In paragraph (4), omit “or EEA registered account information service providers”.

Commencement Information

I43 Sch. 2 para. 38 in force at 31.12.2020 on IP completion day (in accordance with 2020 c. 1, Sch. 5 para. 1(1)), see reg. 1(3)

39.—(1) Regulation 66 (charges) is amended as follows. U.K.

(2) In paragraph (2), for “EEA” substitute “ United Kingdom ”.

(3) After paragraph (2) insert—

“(2A) Where, in respect of payment transaction in euro executed under a payment scheme which operates across the qualifying area, both the payer's and the payee's payment service providers are, or the only payment service provider is, in the United Kingdom the respective payment service providers must ensure that—

(a) the payee pays any charges levied by the payee's payment service provider; and

(b) the payer pays any charges levied by the payer's payment service provider.”

(4) After paragraph (3) insert—

“(4) In paragraph (2A)—

(a) “payment service provider” includes any person who is a PSP as defined in Article 2(8B) of the SEPA regulation;

(b) “the qualifying area” means the area of the United Kingdom and the EEA States.”

Commencement Information

I44 Sch. 2 para. 39 in force at 31.12.2020 on IP completion day (in accordance with 2020 c. 1, Sch. 5 para. 1(1)), see reg. 1(3)

40.  In regulation 68 (confirmation of availability of funds for card-based payment transactions), in paragraph (3)(c), for “regulatory technical standards adopted under Article 98 of the payment services directive” substitute “ technical standards made under regulation 106A ”. U.K.

Commencement Information

I45 Sch. 2 para. 40 in force at 31.12.2020 on IP completion day (in accordance with 2020 c. 1, Sch. 5 para. 1(1)), see reg. 1(3)

41.  In regulation 69 (access to payment accounts for payment initiation services), in paragraphs (2)(a) and (3)(d), for “regulatory technical standards adopted under Article 98 of the payment services directive” substitute “ technical standards made under regulation 106A ”. U.K.

Commencement Information

I46 Sch. 2 para. 41 in force at 31.12.2020 on IP completion day (in accordance with 2020 c. 1, Sch. 5 para. 1(1)), see reg. 1(3)

42.  In regulation 70 (access to payment accounts for account information services), in paragraphs (2)(a) and (3)(c), for “regulatory technical standards adopted under Article 98 of the payment services directive” substitute “ technical standards made under regulation 106A ”. U.K.

Commencement Information

I47 Sch. 2 para. 42 in force at 31.12.2020 on IP completion day (in accordance with 2020 c. 1, Sch. 5 para. 1(1)), see reg. 1(3)

43.—(1) Regulation 85 (application of regulations 86 to 88) is amended as follows. U.K.

(2) In paragraph (1)—

(a) for sub-paragraph (a) substitute—

“(a) executed wholly within the qualifying area in euro under a payment scheme which operates across the qualifying area”;

(b) at the beginning of sub-paragraph (c) insert “ executed wholly under a payment scheme which operates across the qualifying area and ”.

(3) After paragraph (2) insert—

“(3) In paragraph (1), “the qualifying area” means the area of the United Kingdom and the EEA States.”

Commencement Information

I48 Sch. 2 para. 43 in force at 31.12.2020 on IP completion day (in accordance with 2020 c. 1, Sch. 5 para. 1(1)), see reg. 1(3)

44.  In regulation 86 (payment transactions to a payment account), in paragraph (3)(b), for “EEA” substitute “ United Kingdom ”. U.K.

Commencement Information

I49 Sch. 2 para. 44 in force at 31.12.2020 on IP completion day (in accordance with 2020 c. 1, Sch. 5 para. 1(1)), see reg. 1(3)

45.  In regulation 89 (value date and availability of funds), in paragraph (2)(b), omit the words from “or another” to “currencies”. U.K.

Commencement Information

I50 Sch. 2 para. 45 in force at 31.12.2020 on IP completion day (in accordance with 2020 c. 1, Sch. 5 para. 1(1)), see reg. 1(3)

46.  In regulation 96 (force majeure), in paragraph (2), omit “EU or”. U.K.

Commencement Information

I51 Sch. 2 para. 46 in force at 31.12.2020 on IP completion day (in accordance with 2020 c. 1, Sch. 5 para. 1(1)), see reg. 1(3)

47.—(1) Regulation 99 (incident reporting) is amended as follows. U.K.

(2) In paragraph (4), for the words from “must” to the end substitute “ must notify any other relevant authorities in the United Kingdom ”.

(3) Omit paragraph (5).

Commencement Information

I52 Sch. 2 para. 47 in force at 31.12.2020 on IP completion day (in accordance with 2020 c. 1, Sch. 5 para. 1(1)), see reg. 1(3)

48.  In regulation 100 (authentication), in paragraph (5), for “regulatory technical standards adopted under Article 98 of the payment services directive” substitute “ technical standards made under regulation 106A ”. U.K.

Commencement Information

I53 Sch. 2 para. 48 in force at 31.12.2020 on IP completion day (in accordance with 2020 c. 1, Sch. 5 para. 1(1)), see reg. 1(3)

49.  In regulation 101 (dispute resolution), omit paragraph (3). U.K.

Commencement Information

I54 Sch. 2 para. 49 in force at 31.12.2020 on IP completion day (in accordance with 2020 c. 1, Sch. 5 para. 1(1)), see reg. 1(3)

50.—(1) Regulation 106 (functions of the FCA) is amended as follows. U.K.

(2) In paragraph (1), omit the words from “is designated” to “paragraph (2), and”.

(3) Omit paragraph (2).

(4) In paragraph (3), omit the words from “, and to the extent” to “paragraph (1),”.

Commencement Information

I55 Sch. 2 para. 50 in force at 31.12.2020 on IP completion day (in accordance with 2020 c. 1, Sch. 5 para. 1(1)), see reg. 1(3)

51.  After regulation 106 insert— U.K.

“Technical standards

106A.— (1) The FCA may make technical standards specifying—

(a) requirements that must be met by the strong customer authentication referred to in regulation 100(1) and (2);

(b) exemptions from the application of regulation 100(1), (2) and (3), based on the criteria specified in paragraph (3) of this regulation;

(c) the requirements with which security measures have to comply, in accordance with regulation 100(3), in order to protect the confidentiality and integrity of the payment service users' personalised security credentials;

(d) the requirements for common and secure open standards of communication for the purpose of identification, authentication, notification and information, as well as for the implementation of security measures, between account servicing payment service providers, payment initiation service providers, account information service providers, payers, payees and other payment service providers.

(2) In making technical standards under this regulation, the FCA must have regard to the need to—

(a) ensure an appropriate level of security for payment service users and payment service providers through the adoption of effective and risk-based requirements;

(b) ensure the safety of payment service users' funds and personal data;

(c) secure and maintain fair competition among all payment service providers;

(d) ensure technology and business-model neutrality;

(e) allow for the development of user-friendly, accessible and innovative means of payment.

(3) The exemptions referred to in paragraph (1)(b) must be based on—

(a) the level of risk involved in the service provided;

(b) the amount of the transaction, its recurrence, or both;

(c) the payment channel used for the execution of the transaction.

(4) The FCA must review and, if appropriate, update the technical standards on a regular basis in order (among other things) to take account of innovation and technological developments.

(5) Section 138P of the 2000 Act contains provision about the making of technical standards by the FCA.”

Commencement Information

I56 Sch. 2 para. 51 in force at 31.12.2020 on IP completion day (in accordance with 2020 c. 1, Sch. 5 para. 1(1)), see reg. 1(3)

52.—(1) Regulation 107 (application of Part 9 to requirements of directly applicable EU regulations and FCA rules) is amended as follows. U.K.

(2) In the heading, for “directly applicable EU regulations” substitute “ retained direct EU legislation ”.

(3) In sub-paragraph (c), for “directly applicable EU regulations” substitute “ retained direct EU legislation ”.

Commencement Information

I57 Sch. 2 para. 52 in force at 31.12.2020 on IP completion day (in accordance with 2020 c. 1, Sch. 5 para. 1(1)), see reg. 1(3)

53.  In regulation 109 (reporting requirements), omit paragraph (6). U.K.

Commencement Information

I58 Sch. 2 para. 53 in force at 31.12.2020 on IP completion day (in accordance with 2020 c. 1, Sch. 5 para. 1(1)), see reg. 1(3)

54.  Omit regulation 119 (credit agreements). U.K.

Commencement Information

I59 Sch. 2 para. 54 in force at 31.12.2020 on IP completion day (in accordance with 2020 c. 1, Sch. 5 para. 1(1)), see reg. 1(3)

55.  In regulation 123 (interpretation of Part 10)— U.K.

(a) in the definition of “compliance failure”, in paragraph (a), for “directive” substitute “ qualifying ”;

(b) omit the definition of “directive requirement”;

(c) after the definition of “general guidance” insert—

““qualifying requirement” means an obligation, prohibition or restriction imposed by regulation 61 (information on ATM withdrawal charges) or Part 8 (access to payment systems and bank accounts), with the exception of the obligation imposed on the FCA by regulation 105(5) (access to bank accounts);”;

(d) in the definition of “regulated person”, for “directive” substitute “ qualifying ”.

Commencement Information

I60 Sch. 2 para. 55 in force at 31.12.2020 on IP completion day (in accordance with 2020 c. 1, Sch. 5 para. 1(1)), see reg. 1(3)

56.—(1) Regulation 124 (functions of the Payment Systems Regulator) is amended as follows. U.K.

(2) In paragraph (1), for the words from “is designated” to the end substitute “ has the functions and powers conferred on it by these Regulations ”.

(3) In paragraph (2), omit the words from “, and to the extent” to “paragraph (1),”.

(4) In paragraph (3), for “directive”, in both places, substitute “ qualifying ”.

Commencement Information

I61 Sch. 2 para. 56 in force at 31.12.2020 on IP completion day (in accordance with 2020 c. 1, Sch. 5 para. 1(1)), see reg. 1(3)

57.  In regulation 125 (directions), in paragraph (2), for “directive”, in each place, substitute “ qualifying ”. U.K.

Commencement Information

I62 Sch. 2 para. 57 in force at 31.12.2020 on IP completion day (in accordance with 2020 c. 1, Sch. 5 para. 1(1)), see reg. 1(3)

58.  In regulation 133 (complaints), in paragraph (1), for “directive” substitute “ qualifying ”. U.K.

Commencement Information

I63 Sch. 2 para. 58 in force at 31.12.2020 on IP completion day (in accordance with 2020 c. 1, Sch. 5 para. 1(1)), see reg. 1(3)

59.  In regulation 134 (guidance), in paragraph (1)(a), for “directive” substitute “ qualifying ”. U.K.

Commencement Information

I64 Sch. 2 para. 59 in force at 31.12.2020 on IP completion day (in accordance with 2020 c. 1, Sch. 5 para. 1(1)), see reg. 1(3)

60.  In regulation 135 (information and investigation), in paragraph (1)(e), for “directive” substitute “ qualifying ”. U.K.

Commencement Information

I65 Sch. 2 para. 60 in force at 31.12.2020 on IP completion day (in accordance with 2020 c. 1, Sch. 5 para. 1(1)), see reg. 1(3)

61.  In regulation 138 (prohibition on provision of payment services by persons other than payment service providers), in paragraph (1)— U.K.

(a) omit sub-paragraph (d);

(b) in sub-paragraph (e) omit the words from “or exercising” to the end;

(c) in sub-paragraph (f), omit paragraph (ii) and the “or” immediately before it;

(d) in sub-paragraph (h), omit the words from “the European” to the end.

Commencement Information

I66 Sch. 2 para. 61 in force at 31.12.2020 on IP completion day (in accordance with 2020 c. 1, Sch. 5 para. 1(1)), see reg. 1(3)

62.—(1) Regulation 147 (duty to co-operate and exchange of information) is amended as follows. U.K.

(2) In paragraph (1)—

(a) omit sub-paragraph (a);

(b) for sub-paragraphs (b) to (d) substitute—

“(b) the Bank of England; and

(c) any other public authority exercising functions in the United Kingdom in relation to payment service providers,”;

(c) in the words following sub-paragraph (d), for “under the payment services directive and other relevant EU or national legislation” substitute “ under these Regulations and other relevant legislation ”.

(3) In paragraph (2)—

(a) in sub-paragraph (a), for “(1)(a), (c) and (d)” substitute “ (1)(c) ”;

(b) for sub-paragraph (b) substitute—

“(b) the Bank of England when acting in its capacity as a monetary and oversight authority;”;

(c) in the words following sub-paragraph (c), for “the payment services directive and other relevant EU or national legislation” substitute “ these Regulations and other relevant legislation ”.

Commencement Information

I67 Sch. 2 para. 62 in force at 31.12.2020 on IP completion day (in accordance with 2020 c. 1, Sch. 5 para. 1(1)), see reg. 1(3)

63.  After regulation 148 insert— U.K.

“Single Euro Payments Area

148A.— (1) If the SEPA Regulation is revoked under regulation 15 of the Credit Transfers and Direct Debits in Euro (Amendment) (EU Exit) Regulations 2018 M11 , the Treasury may by regulations make such amendments of regulations 40, 63, 66 and 85 of these Regulations as appear to them to be appropriate in connection with the revocation.

(2) Regulations under this regulation may contain transitional and consequential provisions and savings.

(3) A statutory instrument containing regulations under paragraph (1) is subject to annulment in pursuance of a resolution of either House of Parliament.”

Commencement Information

I68 Sch. 2 para. 63 in force at 31.12.2020 on IP completion day (in accordance with 2020 c. 1, Sch. 5 para. 1(1)), see reg. 1(3)

Marginal Citations

M11 S.I. 2018/1199.

64.—(1) Regulation 150 (transitional and saving provisions: authorised payment institutions) is amended as follows. U.K.

(2) In paragraph (1), omit—

(a) the words from “, or the national law” to “first payment services directive,”;

(b) the words from “or (in the case” to the end.

(3) Omit paragraph (5).

Commencement Information

I69 Sch. 2 para. 64 in force at 31.12.2020 on IP completion day (in accordance with 2020 c. 1, Sch. 5 para. 1(1)), see reg. 1(3)

65.  In regulation 152 (transitional provisions: payments through network operators), omit paragraphs (4) to (7). U.K.

Commencement Information

I70 Sch. 2 para. 65 in force at 31.12.2020 on IP completion day (in accordance with 2020 c. 1, Sch. 5 para. 1(1)), see reg. 1(3)

66.  In regulation 153 (transitional and saving provisions: general), omit paragraph (2)(b) and (c). U.K.

Commencement Information

I71 Sch. 2 para. 66 in force at 31.12.2020 on IP completion day (in accordance with 2020 c. 1, Sch. 5 para. 1(1)), see reg. 1(3)

67.  In regulation 154 (transitional provisions: account information services and payment initiation services), in paragraph (3), for sub-paragraph (a) substitute— U.K.

“(a) 14th September 2019; or”.

Commencement Information

I72 Sch. 2 para. 67 in force at 31.12.2020 on IP completion day (in accordance with 2020 c. 1, Sch. 5 para. 1(1)), see reg. 1(3)

68.—(1) Regulation 158 (review) is amended as follows. U.K.

(2) Omit paragraph (4).

(3) In paragraph (5), for “that Act” substitute “ the Small Business, Enterprise and Employment Act 2015 M12 ”.

Commencement Information

I73 Sch. 2 para. 68 in force at 31.12.2020 on IP completion day (in accordance with 2020 c. 1, Sch. 5 para. 1(1)), see reg. 1(3)

Marginal Citations

M12 2015 c. 26.

69.  In Schedule 1 (payment services), in paragraph 2(k)(iv), for “a single EEA State” substitute “ the United Kingdom ”. U.K.

Commencement Information

I74 Sch. 2 para. 69 in force at 31.12.2020 on IP completion day (in accordance with 2020 c. 1, Sch. 5 para. 1(1)), see reg. 1(3)

70.  In Schedule 2 (information to be included in or with an application for authorisation), in paragraph 10(b)(iii), omit the words from “taking into” to the end. U.K.

Commencement Information

I75 Sch. 2 para. 70 in force at 31.12.2020 on IP completion day (in accordance with 2020 c. 1, Sch. 5 para. 1(1)), see reg. 1(3)

71.  Omit Schedule 5 (credit agreements). U.K.

Commencement Information

I76 Sch. 2 para. 71 in force at 31.12.2020 on IP completion day (in accordance with 2020 c. 1, Sch. 5 para. 1(1)), see reg. 1(3)

72.—(1) Schedule 6 (application and modification of legislation) is amended as follows. U.K.

(2) In paragraph 3 (FCA rules)—

(a) in sub-paragraph (1)—

(i) in paragraph (a), omit “, EEA authorised payment institutions, EEA registered account information service providers”;

(ii) omit paragraph (c).

(3) In paragraph 4 (information gathering and investigations)—

(a) in sub-paragraph (e)(i)(aa), in the modification of section 168(1) of the Financial Services and Markets Act 2000, omit paragraphs (d) and (e);

(b) for sub-paragraph (f) substitute—

“(f) section 169 (investigations etc in support of overseas regulator) is to be disregarded;”.

(4) Omit paragraph 6 (incoming firms: intervention by the FCA).

Commencement Information

I77 Sch. 2 para. 72 in force at 31.12.2020 on IP completion day (in accordance with 2020 c. 1, Sch. 5 para. 1(1)), see reg. 1(3)

73.—(1) Schedule 7 (Gibraltar) is amended as follows. U.K.

(2) In the heading before paragraph 1, for “deemed passport rights” substitute “ market access rights ”.

(3) In paragraph 1—

(a) after sub-paragraph (1) insert—

“(1A) Such a firm is referred to in the following provisions of this Schedule as a Gibraltar-based firm.”;

(b) for sub-paragraphs (2) and (3) substitute—

“(2) A Gibraltar-based firm is to be treated as having an entitlement, corresponding to the passport right deriving from the payment services directive that such a firm had immediately before [F4 IP completion day], to establish a branch or provide services in the United Kingdom.

(2A) Despite their amendment or revocation by the Electronic Money, Payment Services and Payment Systems (Amendment and Transitional Provisions) (EU Exit) Regulations 2018, the provisions of these Regulations listed in sub-paragraph (2B) continue to apply, as they had effect immediately before [F4 IP completion day], for the purposes of this paragraph.

(2B) The provisions referred to in sub-paragraph (2A) are as follows—

(a) in regulation 2 (interpretation), in paragraph (1)—

(i) paragraphs (d) and (e) of the definition of “branch”, and

(ii) paragraph (d) and (e) of the definition of “payment service provider”;

(b) in regulation 4 (register of certain payment service providers), paragraph (2);

(c) regulations 29 and 30 (passporting);

(d) regulation 119 and Schedule 5 (credit agreements);

(e) regulation 138 (prohibition on provision of payment services by persons other than payment service providers);

(f) regulation 147 (duty to co-operate and exchange of information);

(g) in regulation 152 (transitional provisions: payment through network operators), paragraphs (4) to (7);

(h) in Schedule 6 (application and modification of legislation), paragraphs 3 and 4.

(3) In those provisions as applying for the purposes of this paragraph—

(a) references to an “EEA authorised payment institution” or “EEA registered account information service provider” are to be read as references to the Gibraltar-based firm,

(b) references to a “home state competent authority” are to be read as references to the Gibraltar Financial Services Commission,

(c) references to “passport rights” are to be read as references to the entitlement mentioned in sub-paragraph (2),

(d) references to the authorisation of any person as a credit institution, custodian or insurer in accordance with a directive are to be read as references to authorisation in accordance with Gibraltar legislation which implemented the directive,

(e) references to a person's rights or entitlements are to be read as references to the rights or entitlements the person would have, if the person's rights or entitlements were being determined immediately before [F4 IP completion day].”

(4) In the heading before paragraph 2, for “deemed passport rights” substitute “ market access rights ”.

(5) In paragraph 2—

(a) in sub-paragraph (1) for “its passport right,” substitute “ the passport right that such a firm had immediately before [F5 IP completion day], ”;

(b) after sub-paragraph (1) insert—

“(1A) Despite their amendment or revocation by the Electronic Money, Payment Services and Payment Systems (Amendment and Transitional Provisions) (EU Exit) Regulations 2018, the provisions of these Regulations listed in sub-paragraph (1B) continue to apply, as they had effect immediately before [F6 IP completion day], for the purposes of this paragraph.

(1B) The provisions referred to in sub-paragraph (1A) are as follows—

(a) in regulation 4 (register of certain payment service providers), paragraph (1)(a);

(b) regulations 27 and 28 (notice of intention);

(c) regulation 30 (supervision of firms exercising passport rights);

(d) in regulation 32 (additional activities), paragraph (2)(c);

(e) in regulation 34 (use of agents), paragraphs (2), (6), (7), (10), (11) and (14);

(f) in regulation 147 (duty to co-operate and exchange information), paragraph (1);

(g) in regulation 153 (transitional and saving provisions), paragraph (2).”;

(c) for sub-paragraph (2) substitute—

“(2) In relation to an authorised payment institution or registered account information service provider which establishes a branch or provides services in Gibraltar, those provisions are to be read as if—

(a) references to an “EEA branch” were references to such a branch;

(b) references to an “EEA State” were references to Gibraltar;

(c) references to a “host state competent authority” were references to the Gibraltar Financial Services Commission; and

(d) references to “passport rights” were references to the entitlement mentioned in sub-paragraph (1).”

(6) After paragraph 2 insert—

“References to Gibraltar regulator

2A.— (1) The Treasury may by regulations made by statutory instrument make such amendments of the references in paragraphs 1 and 2 to the Gibraltar Financial Services Commission, or any references previously substituted for those references, as appear to the Treasury to be appropriate in order to take account of any change in the law of Gibraltar.

(2) A statutory instrument containing regulations under sub-paragraph (1) is subject to annulment in pursuance of a resolution of either House of Parliament.”

(7) Omit paragraph 3.

Textual Amendments

F4 Words in Sch. 2 para. 73(3)(b) substituted (30.12.2020) by The Financial Services and Economic and Monetary Policy (Consequential Amendments) (EU Exit) Regulations 2020 (S.I. 2020/1301), regs. 1, 3, Sch. para. 6(b)(i)

F5 Words in Sch. 2 para. 73(5)(a) substituted (30.12.2020) by The Financial Services and Economic and Monetary Policy (Consequential Amendments) (EU Exit) Regulations 2020 (S.I. 2020/1301), regs. 1, 3, Sch. para. 6(b)(ii)

F6 Words in Sch. 2 para. 73(5)(b) substituted (30.12.2020) by The Financial Services and Economic and Monetary Policy (Consequential Amendments) (EU Exit) Regulations 2020 (S.I. 2020/1301), regs. 1, 3, Sch. para. 6(b)(iii)

Commencement Information

I78 Sch. 2 para. 73 in force at 31.12.2020 on IP completion day (in accordance with 2020 c. 1, Sch. 5 para. 1(1)), see reg. 1(3)

Regulation 3(2)

SCHEDULE 3 U.K. Transitional Provisions

PART 1 U.K. Transitional provisions relating to Electronic Money Regulations 2011

Interpretation U.K.

1.  In this Part of this Schedule—

(a) “EMR 2011” means the Electronic Money Regulations 2011 M13 ,

(b) “the 2000 Act” means the Financial Services and Markets Act 2000 M14 ,

[F7 (ba) “the 2018 Regulations” means the Electronic Money, Payment Services and Payment Systems (Amendment and Transitional Provisions) (EU Exit) Regulations 2018;]

(c) “the FCA” means the Financial Conduct Authority, and

(d) “EEA authorised electronic money institution”, “home state competent authority”, “passport right”, “the electronic money directive”, “the money laundering directive” and “the payment services directive” each has the meaning given by EMR 2011 as those Regulations have effect before the amendments made by Schedule 2.

Textual Amendments

F7 Sch. 3 para. 1(ba) inserted (6.9.2019) by The Financial Services (Electronic Money, Payment Services and Miscellaneous Amendments) (EU Exit) Regulations 2019 (S.I. 2019/1212), regs. 1(2), 7(2)

Marginal Citations

M13 S.I. 2011/99.

M14 2000 c. 8.

Transitional authorisation for EEA authorised electronic money institutions U.K.

2.—(1) This paragraph applies to a person who—

(a) immediately before [F8 IP completion day] is entitled to provide electronic money issuance, redemption, distribution or payment services in the United Kingdom in the exercise of a passport right as an EEA authorised electronic money institution,

(b) would (apart from this Part of this Schedule) cease from [F8 IP completion day] to be entitled to provide those services in the United Kingdom, and

(c) has notified the FCA in accordance with paragraph 3 that the person wishes this paragraph to apply in the person's case.

(2) During the transition period defined in paragraph 10—

(a) the person is to be taken to be an authorised electronic money institution whose authorisation under regulation 9 of EMR 2011 relates to the services mentioned in sub-paragraph (1)(a) and (b), and

(b) accordingly, references in EMR 2011 to an authorised electronic money institution are to be read as including a person to whom this paragraph applies.

(3) Sub-paragraph (2) is subject to paragraphs 7 and 8.

(4) In the following provisions of this Part of this Schedule, “transitional authorisation” means authorisation by virtue of this paragraph as an authorised electronic money institution.

Textual Amendments

F8 Words in Sch. 3 para. 2 substituted (31.1.2020 immediately before exit day) by The Financial Services (Consequential Amendments) Regulations 2020 (S.I. 2020/56), regs. 1, 8(2)(a)

Requirements to be met by notification U.K.

3.—(1) A notification for the purposes of paragraph 2(1)(c) must—

(a) be made in such manner as the FCA may direct, and

[F9 (b) be made during the period beginning with 28 December 2018 and ending with the day preceding the day on which IP completion day falls.]

(2) The notification must—

(a) state the name and address of the person making the notification and any authorisation or reference number,

(b) specify the person's home state competent authority,

(c) specify a postal address in the United Kingdom to be used for correspondence,

(d) identify the electronic money issuance, redemption, distribution or payment services which the person is entitled to provide in the United Kingdom by virtue of being an EEA authorised electronic money institution for the purposes of EMR 2011,

(e) if, for the provision of the services in the United Kingdom, the person uses an agent who is registered with the home state competent authority, include the information referred to in regulation 34(3)(a) of EMR 2011,

(f) if the person uses or intends to use a branch in the United Kingdom to provide the services, state the names of those responsible for the management of the branch and details of its organisational structure,

(g) identify the distributors, if any, whom the person has engaged or intends to engage to distribute or redeem electronic money in exercise of the person's rights by virtue of the person's transitional authorisation,

(h) specify any restrictions or conditions that have been imposed on the person by its home state competent authority, and

(i) specify any precautionary measures taken by the FCA under regulation 30(8) of EMR 2011 that are in force.

Textual Amendments

F9 Sch. 3 para. 3(1)(b) substituted (31.1.2020 immediately before exit day) by The Financial Services (Consequential Amendments) Regulations 2020 (S.I. 2020/56), regs. 1, 8(3)

Registration of agents U.K.

4.—(1) If a notification for the purposes of paragraph 2(1)(c) includes the information required by paragraph 3(2)(e) in relation to an agent, the FCA must, with effect from [F10 IP completion day] or as soon as practicable after that time, include the agent on the register maintained under regulation 4 of EMR 2011.

(2) A person to whom paragraph 2 applies may apply to the FCA under regulation 34 of EMR 2011 before [F10 IP completion day] for the registration at any time after [F10 IP completion day] of an agent not falling within sub-paragraph (1).

Textual Amendments

F10 Words in Sch. 3 para. 4 substituted (31.1.2020 immediately before exit day) by The Financial Services (Consequential Amendments) Regulations 2020 (S.I. 2020/56), regs. 1, 8(2)(b)

Requirements imposed by FCA U.K.

5.—(1) This paragraph applies in relation to a person to whom paragraph 2 applies.

(2) Any requirement which—

(a) was imposed on the person—

(i) as a precautionary measure under regulation 30(8) of EMR 2011, or

(ii) under section 196 of the 2000 Act as applied by paragraph 4A of Schedule 3 to EMR 2011, and

(b) has effect immediately before [F11 IP completion day],

is to continue to have effect at and after that time as if it were imposed by the FCA under regulation 7 of EMR 2011.

(3) The FCA may exercise its powers under regulation 7 of EMR 2011 in relation to the person if it appears to the FCA that, immediately before [F11 IP completion day], the condition in section 194(1)(a) or (b) of the 2000 Act, as applied by paragraph 4A of Schedule 3 to EMR 2011, was met.

Textual Amendments

F11 Words in Sch. 3 para. 5 substituted (31.1.2020 immediately before exit day) by The Financial Services (Consequential Amendments) Regulations 2020 (S.I. 2020/56), regs. 1, 8(2)(c)

Duties of person relying on transitional authorisation U.K.

6.—(1) This paragraph applies, during the transition period defined in paragraph 10, to any person in relation to whom paragraph 2 applies.

(2) The person must notify the FCA of—

(a) any material change affecting any matter dealt with in the information contained in or accompanying the notification for the purposes of paragraph 2(1)(c),

(b) the cancellation or variation by the person's home state competent authority of the person's authorisation to issue electronic money and provide payment services in accordance with the electronic money directive,

(c) any regulatory action taken against the person by the person's home state competent authority,

(d) any adverse judgments made against the person by the person's home state competent authority in pursuance of the money laundering directive, or

(e) the person's intention to engage a distributor through whom electronic money is to be distributed or redeemed.

(3) The person must when required by the FCA provide the FCA with such evidence as the FCA may reasonably require to demonstrate the person's compliance with the law of the person's home state implementing Article 7 of the electronic money directive (safeguarding).

Exclusion of certain provisions of Electronic Money Regulations 2011 U.K.

7.—(1) The following provisions of EMR 2011 do not apply in relation to a person while the person is an authorised electronic money institution by virtue of paragraph 2—

(a) regulation 10(1) (cancellation of authorisation);

(b) regulation 17 (duty to notify changes);

(c) regulation 19 (capital requirements);

(d) [F12 except where the person is subject to insolvency proceedings (as defined in regulation 24 of EMR 2011) in the United Kingdom,] in regulation 24 (insolvency events), paragraphs (1), (2), (4) and (5);

(e) regulation 25 (accounting and statutory audit);

(f) in Schedule 3 (application and modification of legislation), paragraph 4 (control over electronic money institutions).

(2) Regulation 6 (conditions for authorisation) does not apply in relation to a person by virtue of the person's transitional authorisation, but applies in relation to any application for authorisation made by the person during transition period defined in paragraph 10.

Textual Amendments

F12 Words in Sch. 3 para. 7(1)(d) inserted (6.9.2019) by The Financial Services (Electronic Money, Payment Services and Miscellaneous Amendments) (EU Exit) Regulations 2019 (S.I. 2019/1212), regs. 1(2), 7(3)

Power of FCA to cancel transitional authorisation U.K.

8.—(1) The FCA may cancel a person's transitional authorisation and remove the person from the register where—

(a) the person's authorisation by the person's home state competent authority is cancelled,

(b) the person has failed to comply with the terms of the person's authorisation by the person's home state competent authority,

(c) the person does not issue electronic money in the United Kingdom during the 12 months beginning with [F13 IP completion day],

(d) the person ceases to engage in business activity in the United Kingdom for more than 6 months,

(e) the person's notification for the purposes of paragraph 2(1)(c) contains false statements,

(f) the person lacks one or more of the following—

(i) robust governance arrangements for its electronic money issuance and payment service business, including a clear organisational structure with well-defined, transparent and consistent lines of responsibility,

(ii) effective procedures to identify, manage, monitor and report any risks to which the person might be exposed, and

(iii) adequate internal control mechanisms, including sound administrative, risk management and accounting procedures,

(g) any of the directors, or other persons responsible for the management of the person's electronic money and payment services business, is not of good repute,

(h) the person does not have a business plan under which appropriate and proportionate systems, resources and procedures will be employed by the person to operate soundly,

(i) the person has not taken adequate measures for the purposes of safeguarding electronic money holders' funds in accordance with regulation 20 of EMR 2011,

(j) in the case of a person carrying on payment initiation services, the person does not hold professional indemnity insurance, or a comparable guarantee, of the kind mentioned in regulation 6(6)(e) of EMR 2011,

(k) the person would constitute a threat to the stability of, or trust in, a payment system by continuing the person's electronic money or payment services business,

(l) the cancellation is desirable in order to protect the interests of consumers, or

(m) the person's issuance of electronic money or provision of payment services is otherwise unlawful, including where such provision of services in unlawful because the person's registration in a register maintained under regulation 54 or 55 of the Money Laundering, Terrorist Financing and Transfer of Funds (Information on the Payer) Regulations 2017 M15 has been cancelled under regulation 60 of those Regulations.

(2) Regulation 10(4) to (7) of EMR 2011 apply in relation to cancellation under sub-paragraph (1) of this paragraph as they apply in relation to cancellation under regulation 10(1) of those Regulations.

Textual Amendments

F13 Words in Sch. 3 para. 8 substituted (31.1.2020 immediately before exit day) by The Financial Services (Consequential Amendments) Regulations 2020 (S.I. 2020/56), regs. 1, 8(2)(d)

Marginal Citations

M15 S.I. 2017/692.

Notice of intention U.K.

9.—(1) A person in relation to whom paragraph 2 applies must, before the end of the 12 months beginning with the day on which [F14 IP completion day] falls, notify the FCA—

(a) whether the person or a member of the person's immediate group, as defined by section 421ZA of the 2000 Act, intends to apply under regulation 5 of EMR 2011, and

(b) whether the person intends to cease at or before the end of the transition period to provide in the United Kingdom the services to which the transitional authorisation relates.

(2) The person must notify the FCA within a reasonable time of any change in an intention previously notified.

Textual Amendments

F14 Words in Sch. 3 para. 9 substituted (31.1.2020 immediately before exit day) by The Financial Services (Consequential Amendments) Regulations 2020 (S.I. 2020/56), regs. 1, 8(2)(e)

Transition period U.K.

10.—(1) The transition period in relation to a person is a period beginning with [F15 IP completion day] and ending with a day determined under this paragraph, or with any earlier day on which the cancellation under paragraph 8 of the person's transitional authorisation takes effect.

(2) In a case where a person has applied under regulation 5 of EMR 2011, on or after the date on which this regulation comes into force, to become an authorised electronic money institution and has not withdrawn the application—

(a) if the application is granted, the person's transition period ends with the day before the day stated in accordance with regulation 9(5) of EMR 2011 as that on which the authorisation takes effect, and

(b) if the application is refused, the decision notice under regulation 9(7) of EMR 2011 must state the date on which the person's transition period is to end.

(3) In any other case, the person's transition period ends at the end of the 3 years beginning with the day on which [F15 IP completion day] falls.

(4) The person may give notice to the FCA specifying a date (earlier than that determined under sub-paragraph (2) or (3)) on which the person will cease to engage in new business covered by the person's transitional authorisation.

(5) The FCA may by notice to the person require the person to specify a date under sub-paragraph (4) before the end of a period specified in the notice, and if the person does not do so the FCA may itself specify a date on which the person's transitional authorisation will cease to cover new business.

Textual Amendments

F15 Words in Sch. 3 para. 10 substituted (31.1.2020 immediately before exit day) by The Financial Services (Consequential Amendments) Regulations 2020 (S.I. 2020/56), regs. 1, 8(2)(f)

Power to extend period specified in paragraph 10(3) U.K.

11.—(1) The Treasury may by regulations made by statutory instrument amend paragraph 10(3) so as to extend the period referred to in that provision, if the Treasury consider it necessary to do so.

(2) The Treasury may make regulations under sub-paragraph (1) only if, no later than 6 months before the end of the period to be extended, the FCA has submitted to the Treasury an assessment as to the effect of extending, or not extending, the period on persons (in general) to whom paragraph 2 applies.

(3) Regulations under sub-paragraph (1) may not extend the period for the time being by more than 12 months.

(4) A statutory instrument containing regulations under sub-paragraph (1) is subject to annulment in pursuance of a resolution of either House of Parliament.

Directions U.K.

12.  The power of the FCA to give directions under this Part of this Schedule includes power—

(a) to give different directions in relation to different notifications or categories of notification, and

(b) to vary or revoke a previous direction.

[F16 PART 1A U.K. Continuation of authorisation for limited purposes: Electronic Money Regulations 2011

Textual Amendments

F16 Sch. 3 Pt. 1A inserted (1.3.2019) by The Financial Services Contracts (Transitional and Saving Provision) (EU Exit) Regulations 2019 (S.I. 2019/405), regs. 1(2), 10(2)

Interpretation U.K.

12A.   The interpretative provisions in paragraph 1 apply also for the purposes of this Part of this Schedule [F17 and “PSR 2017” means the Payment Services Regulations 2017].

Textual Amendments

F17 Words in Sch. 3 para. 12A inserted (31.1.2020) by The Financial Services (Miscellaneous) (Amendment) (EU Exit) (No. 2) Regulations 2019 (S.I. 2019/1010), regs. 1(3), 7(2); 2020 c. 1, Sch. 5 para. 1(1)

Continued authorisation for limited purposes U.K.

12B.— (1) This paragraph applies to a person in relation to whom the [F18 IP completion day] conditions or the transitional authorisation conditions are satisfied.

(2) The “[F18 IP completion day] conditions”, in relation to a person, are—

(a) that immediately before [F18 IP completion day] the person was providing electronic money issuance or payment services through a branch or agent in the United Kingdom in the exercise of a passport right as an EEA authorised electronic money institution,

(b) that immediately after [F18 IP completion day] the person is not (apart from under this Part of this Schedule) an authorised electronic money institution, and

(c) that immediately after [F18 IP completion day]—

(i) the person has outstanding obligations under contracts which the person entered into through a branch or agent in the United Kingdom as an EEA authorised electronic money institution exercising passport rights, or

(ii) any electronic money issued by the person through a branch or agent in the United Kingdom as an EEA authorised electronic money institution exercising passport rights has not been redeemed.

(3) The “transitional authorisation conditions”, in relation to a person, are—

(a) that on [F18 IP completion day] the person became authorised to provide electronic money issuance, redemption, distribution or payment services in the United Kingdom by virtue of paragraph 2,

(b) that the person has provided any such services in the United Kingdom either—

(i) before [F18 IP completion day], in the exercise of a passport right as an EEA authorised electronic money institution, or

(ii) on or after [F18 IP completion day], in accordance with paragraph 2,

(c) that immediately after the end of the transition period defined in paragraph 10 the person is not (apart from under this Part of this Schedule) an authorised electronic money institution, and

(d) that immediately after the end of that period—

(i) the person has outstanding obligations under contracts which the person entered into as an EEA authorised electronic money institution exercising passport rights, or

(ii) electronic money issued by the person as an EEA authorised electronic money institution exercising passport rights has not been redeemed.

(4) During the extension period defined in paragraph 12G—

(a) a person to whom this paragraph applies is to be taken to be an authorised electronic money institution whose authorisation under regulation 9 of EMR 2011 relates to the permitted services specified in paragraph 12E, F19 ...

(b) accordingly, references in EMR 2011 [F20 and the Payment Services Regulations 2017] to an authorised electronic money institution are to be read as including a person to whom this paragraph applies[F21 , and

(c) a requirement imposed by a home state competent authority and which has effect immediately before [F18 IP completion day] continues to have effect on and after that day as if it were imposed by the FCA under regulation 7 of EMR 2011 insofar as it could be imposed by the FCA under that regulation.]

(5) Sub-paragraph (4) is subject to paragraphs 12C(4), 12H and 12I.

(6) In this paragraph reference to providing services at a particular time includes where the performance of a pre-existing contract requires, or may require, a service to be provided at another time.

Textual Amendments

F18 Words in Sch. 3 para. 12B substituted (31.1.2020 immediately before exit day) by The Financial Services (Consequential Amendments) Regulations 2020 (S.I. 2020/56), regs. 1, 8(2)(g)

F19 Word in Sch. 3 para. 12B(4)(a) omitted (6.9.2019) by virtue of The Financial Services (Electronic Money, Payment Services and Miscellaneous Amendments) (EU Exit) Regulations 2019 (S.I. 2019/1212), regs. 1(2), 7(4)(a)

F20 Words in Sch. 3 para. 12B(4)(b) inserted (6.9.2019) by The Financial Services (Electronic Money, Payment Services and Miscellaneous Amendments) (EU Exit) Regulations 2019 (S.I. 2019/1212), regs. 1(2), 7(4)(b)

F21 Sch. 3 para. 12B(4)(c) and preceding word inserted (6.9.2019) by The Financial Services (Electronic Money, Payment Services and Miscellaneous Amendments) (EU Exit) Regulations 2019 (S.I. 2019/1212), regs. 1(2), 7(4)(c)

Duty to notify FCA U.K.

12C.— (1) A person to whom paragraph 12B or 12L applies must notify the FCA of that fact as soon as reasonably practicable, and in any event not later than one month after the person first becomes aware of an obligation to perform a pre-existing contract.

(2) In this Part a “pre-existing contract”, in relation to a person to whom paragraph 12B applies, means a contract—

(a) which was entered into before the extension period defined in paragraph 12G through branch or agent in the United Kingdom, and

(b) under which the person is obliged to issue electronic money or to provide payment services.

(3) Notification under sub-paragraph (1) must be made in such manner, and be accompanied by such information, as the FCA may direct.

(4) The FCA is not obliged to include a person to whom paragraph 12B applies on the register maintained under regulation 4 of EMR 2011 until the person notifies the FCA under sub-paragraph (1).

(5) During the extension period defined in paragraph 12G, a person to whom paragraph 12B applies must notify the FCA of any of the matters mentioned in paragraph 6(2)(b) to (d).

Agents U.K.

12D.   If a notification under paragraph 12C includes information as to the use of an agent who is registered with the home state competent authority, the FCA must include the agent on the register maintained under regulation 4 of EMR 2011.

Permitted services U.K.

12E.— (1) This paragraph sets out the permitted services for the purposes of paragraph 12B(4)(a).

(2) The permitted services are—

(a) where the [F22 IP completion day] conditions in paragraph 12B(2) are met, services of the kind mentioned in paragraph 12B(2)(a), but only to the extent that the issue of electronic money, or the provision of payment services, is necessary to enable the person to whom paragraph 12B applies to perform a pre-existing contract [F23 or to redeem outstanding electronic money], or

(b) where the transitional authorisation conditions in paragraph 12B(3) are met, services of the kind mentioned in paragraph 12B(3)(b)(i) or (ii), but only to the extent that the issue of electronic money, or the provision of payment services, is necessary to enable the person to whom paragraph 12B applies to perform a pre-existing contract [F24 or to redeem outstanding electronic money].

(3) If a pre-existing contract is varied by agreement for the purpose of complying with regulatory requirements or reducing a risk to the person to whom paragraph 12D applies, but without extending the duration of the contract or materially altering its commercial effect, the contract as varied remains a pre-existing contract.

(4) The FCA may, on an application made before the end of the extension period by a person to whom paragraph 12B applies, approve a plan (a “wind-down plan”) under which new contracts may be entered into for the purposes of the orderly winding down of the person’s business of issuing electronic money or payment services in the United Kingdom.

(5) If a wind-down plan is approved by the FCA, the permitted services include services provided in accordance with the wind-down plan.

(6) A person providing permitted services in accordance with this paragraph must, when required by the FCA, provide the FCA with such evidence as the FCA may reasonably require to demonstrate the person’s compliance with the law of the person’s home state implementing Article 7 of the electronic money directive (safeguarding).

Textual Amendments

F22 Words in Sch. 3 para. 12E substituted (31.1.2020 immediately before exit day) by The Financial Services (Consequential Amendments) Regulations 2020 (S.I. 2020/56), regs. 1, 8(2)(h)

F23 Words in Sch. 3 para. 12E(2)(a) inserted (6.9.2019) by The Financial Services (Electronic Money, Payment Services and Miscellaneous Amendments) (EU Exit) Regulations 2019 (S.I. 2019/1212), regs. 1(2), 7(5)(a)

F24 Words in Sch. 3 para. 12E(2)(b) inserted (6.9.2019) by The Financial Services (Electronic Money, Payment Services and Miscellaneous Amendments) (EU Exit) Regulations 2019 (S.I. 2019/1212), regs. 1(2), 7(5)(b)

Notification that authorisation no longer required U.K.

12F.— (1) A person to whom paragraph 12B applies and who has notified the FCA under paragraph 12C(1) must notify the FCA once it no longer has obligations under pre-existing contracts [F25 and has redeemed electronic money issued through a branch in the United Kingdom].

(2) On receiving a notification under sub-paragraph (1), the FCA must, if satisfied that the person giving the notification no longer has obligations under pre-existing contracts [F26 and has redeemed electronic money issued through a branch in the United Kingdom]—

(a) notify the person of the date on which the person will cease to be an authorised electronic money institution by virtue of this Part of this Schedule, and

(b) remove the person from the register from that date.

F27 (3) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Textual Amendments

F25 Words in Sch. 3 para. 12F(1) inserted (6.9.2019) by The Financial Services (Electronic Money, Payment Services and Miscellaneous Amendments) (EU Exit) Regulations 2019 (S.I. 2019/1212), regs. 1(2), 7(6)(a)

F26 Words in Sch. 3 para. 12F(2) inserted (6.9.2019) by The Financial Services (Electronic Money, Payment Services and Miscellaneous Amendments) (EU Exit) Regulations 2019 (S.I. 2019/1212), regs. 1(2), 7(6)(b)

F27 Sch. 3 para. 12F(3) omitted (6.9.2019) by virtue of The Financial Services (Electronic Money, Payment Services and Miscellaneous Amendments) (EU Exit) Regulations 2019 (S.I. 2019/1212), regs. 1(2), 7(6)(c)

Extension period U.K.

12G.— (1) The extension period in relation to a person begins—

(a) where the [F28 IP completion day] conditions are met, with the day on which [F28 IP completion day] falls, and

(b) where the transitional authorisation conditions are met, with the end of the transition period defined by paragraph 10.

(2) The extension period in relation to a person ends with the earliest of the following—

(a) the day before the date stated in accordance with regulation 9(5) of EMR 2011 as that on which the person’s authorisation as an electronic money institution (otherwise than by virtue of this Schedule) takes effect;

(b) the day on which the transfer to another person of the person’s business of providing electronic money issuance, redemption, distribution or payment services in the United Kingdom takes effect;

(c) in a case where the person has notified the FCA under paragraph 12C(1), the day determined by the FCA under paragraph 12F(2);

(d) in a case where the person has not notified the FCA under paragraph 12C(1), the time when all the person’s obligations under relevant contracts have been discharged [F29 and the person has redeemed electronic money issued through a branch or an agent in the United Kingdom];

(e) the day on which any cancellation under paragraph 12J takes effect;

(f) the day the person ceases to be authorised by its home state competent authority;

(g) the end of the period of 5 years beginning with the day on which the extension period began.

[F30 (3) “Relevant contract”, in relation to a person to whom paragraph 12B applies, means a contract—

(a) which—

(i) is a pre-existing contract; or

(ii) was entered into in accordance with a wind-down plan approved by the FCA under paragraph 12E(4); and

(b) under which the person is obliged to issue electronic money or payment services.]

Textual Amendments

F28 Words in Sch. 3 para. 12G substituted (31.1.2020 immediately before exit day) by The Financial Services (Consequential Amendments) Regulations 2020 (S.I. 2020/56), regs. 1, 8(2)(i)

F29 Words in Sch. 3 para. 12G(2)(d) inserted (6.9.2019) by The Financial Services (Electronic Money, Payment Services and Miscellaneous Amendments) (EU Exit) Regulations 2019 (S.I. 2019/1212), regs. 1(2), 7(7)(a)

F30 Sch. 3 para. 12G(3) substituted (6.9.2019) by The Financial Services (Electronic Money, Payment Services and Miscellaneous Amendments) (EU Exit) Regulations 2019 (S.I. 2019/1212), regs. 1(2), 7(7)(b)

[F31 Supervision and enforcement of persons to whom paragraph 12B applies U.K.

12H.— (1) In relation to a person to whom paragraph 12B applies, the provisions of EMR 2011 (other than those disapplied by paragraph 7(1)) apply while the person is an authorised electronic money institution by virtue of paragraph 12B(4).

(2) Paragraph 7(2) applies in relation to that person as if the reference—

(a) to a person’s transitional authorisation were a reference to authorisation by virtue of paragraph 12B(4);

(b) to the transition period were a reference to the extension period in paragraph 12G.

Textual Amendments

F31 Sch. 3 paras. 12H, 12HA substituted for Sch. 3 para. 12H (6.9.2019) by The Financial Services (Electronic Money, Payment Services and Miscellaneous Amendments) (EU Exit) Regulations 2019 (S.I. 2019/1212), regs. 1(2), 7(8)

Supervision and enforcement of persons to whom paragraph 12L (exemption from prohibition) applies U.K.

12HA.— (1) The following sub-paragraphs apply in relation to a person to whom paragraph 12L applies.

(2) Sections 165, 166, 175 and 177 of the 2000 Act, as modified by Schedule 3 to EMR 2011, apply as if the references to an electronic money issuer were references to a person who is exempt from the prohibition in regulation 63(1) of those Regulations by virtue of paragraph 12L.

(3) If the FCA considers that a person—

(a) has not notified the FCA in accordance with paragraph 12C; or

(b) has acted in a manner which the FCA considers contrary to the advancement of its objectives under EMR 2011 or the 2018 Regulations,

the FCA may publish a statement to that effect.

(4) The procedure in regulation 53 of EMR 2011 applies to the publication of a statement under sub-paragraph (3) as if the references to regulation 50 were references to this paragraph.

(5) Section 393(4) of the 2000 Act applies to notices issued in accordance with this paragraph in the same way as it applies to notices issued in accordance with regulation 53 in relation to the publication of statements under regulation 50 of EMR 2011 by virtue of paragraph 8 of Schedule 3 to EMR 2011.

(6) The FCA may, if it considers it appropriate to do so, publish information provided under paragraph 12C in respect of a person.

(7) Publication under sub-paragraph (6) is to be in such a manner as the regulator considers appropriate.]

Textual Amendments

F31 Sch. 3 paras. 12H, 12HA substituted for Sch. 3 para. 12H (6.9.2019) by The Financial Services (Electronic Money, Payment Services and Miscellaneous Amendments) (EU Exit) Regulations 2019 (S.I. 2019/1212), regs. 1(2), 7(8)

Variation and cancellation of authorisation U.K.

12I.— (1) In respect of a person to whom paragraph 12B applies, the FCA may—

(a) cancel the person’s authorisation by virtue of that paragraph as an authorised electronic money institution, or

(b) limit the permitted services to which the authorisation relates.

(2) The FCA may only exercise the power in sub-paragraph (1) where—

(a) the person’s authorisation by the person’s home state competent authority is cancelled,

(b) the person has failed to comply with the terms of the person’s authorisation by the person’s home state competent authority,

(c) the person does not issue electronic money in the United Kingdom during the 12 months beginning with [F32 IP completion day],

(d) the person ceases to engage in business activity in the United Kingdom for more than six months,

(e) the person’s notification under paragraph 12C contains false statements,

(f) the person has not taken adequate measures for the purposes of safeguarding electronic money holders’ funds in accordance with regulation 20 of EMR 2011 [F33 and the 2018 Regulations],

(g) the person would constitute a threat to the stability of, or trust in, a payment system by continuing the person’s electronic money or payment services business,

(h) the cancellation is desirable in order to protect the interests of electronic money holders or payment service users, F34 ...

(i) the person’s provision of payment services [F35 or issuance of electronic money] is otherwise unlawful, including where such provision of services in unlawful because the person’s registration in a register maintained under regulation 54 or 55 of the Money Laundering, Terrorist Financing and Transfer of Funds (Information on the Payer) Regulations 2017 has been cancelled under regulation 60 of those Regulations,[F36 or

(j) the person has not submitted a notification in accordance with paragraph 12C.]

Textual Amendments

F32 Words in Sch. 3 para. 12I substituted (31.1.2020 immediately before exit day) by The Financial Services (Consequential Amendments) Regulations 2020 (S.I. 2020/56), regs. 1, 8(2)(j)

F33 Words in Sch. 3 para. 12I(2)(f) inserted (6.9.2019) by The Financial Services (Electronic Money, Payment Services and Miscellaneous Amendments) (EU Exit) Regulations 2019 (S.I. 2019/1212), regs. 1(2), 7(9)(a)

F34 Word in Sch. 3 para. 12I(2)(h) omitted (6.9.2019) by virtue of The Financial Services (Electronic Money, Payment Services and Miscellaneous Amendments) (EU Exit) Regulations 2019 (S.I. 2019/1212), regs. 1(2), 7(9)(b)

F35 Words in Sch. 3 para. 12I(2)(i) inserted (6.9.2019) by The Financial Services (Electronic Money, Payment Services and Miscellaneous Amendments) (EU Exit) Regulations 2019 (S.I. 2019/1212), regs. 1(2), 7(9)(c)

F36 Sch. 3 para. 12I(2)(j) and preceding word inserted (6.9.2019) by The Financial Services (Electronic Money, Payment Services and Miscellaneous Amendments) (EU Exit) Regulations 2019 (S.I. 2019/1212), regs. 1(2), 7(9)(d)

Variation and cancellation: procedure U.K.

12J.— (1) If the FCA proposes to exercise the power in paragraph 12I or 12L(3) in relation to a person, it must give the person a warning notice.

(2) If the FCA decides to exercise the power in paragraph 12I or 12L(3) in relation to a person, it must give the person a decision notice.

(3) Part 26 of the 2000 Act (notices) applies to a notice under sub-paragraph (1) or (2) as it applies (by virtue of Schedule 3 to EMR 2011) in relation to a notice under EMR 2011.

(4) A person in respect of whom the power in paragraph 12I or 12L(3) is exercised may refer the decision to exercise the power to the Upper Tribunal.

(5) Part 9 of the 2000 Act (hearings and appeals) applies to a reference to the Upper Tribunal under sub-paragraph (4) as it applies (by virtue of Schedule 3 to EMR 2011) in relation to a reference under EMR 2011.

Power to charge fees U.K.

12K.— (1) The FCA may make rules providing for the payment to it of fees in connection with the discharge of a function under this Part of this Schedule.

(2) Rules under sub-paragraph (1) may not provide for the payment of a fee greater than an amount equal to the expenses incurred, or expected to be incurred, in the discharge of the function.

(3) Sections 138F to 138O of the 2000 Act (procedural provisions) apply to rules made under sub-paragraph (1) as they apply to rules made by the FCA under the 2000 Act.

Exemption from prohibition U.K.

12L.— [F37 (1) A person to whom this paragraph applies is, subject to sub-paragraph (6), exempt from the prohibitions in regulation 138(1) of the Payment Services Regulations 2017 and in regulation 63(1) of EMR 2011 for a period of five years beginning with the [F38 IP completion day], but only to the extent that it is necessary for the person to provide payment services or electronic money services in the United Kingdom to perform a pre-existing contract or to redeem outstanding electronic money.]

(2) This paragraph applies to an EEA authorised electronic money institution exercising its passport rights in the United Kingdom immediately before [F38 IP completion day] other than through a branch in the United Kingdom or a UK-based agent.

(3) The FCA may cancel the exemption of a person to whom this paragraph applies, or direct that paragraph 12B is to apply to the person, if it considers that doing so is necessary—

(a) for the prevention, detection, investigation or prosecution of a criminal offence;

(b) for the protection of electronic money holders or payment service users; or

(c) for the protection of trust in, or the stability of, a payment system.

(4) In exercising the power in paragraph (3), the FCA must take into account—

(a) the person’s conduct,

(b) the practicality of supervision by the FCA,

(c) the size of the person’s undertaking, and

(d) the nature of the services the person provides.

(5) Paragraph 3 of Schedule 3 to EMR 2011 has effect in relation to the FCA’s exercise of its powers under this paragraph.

[F39 (6) A person to whom paragraph applies is exempt from the prohibition in regulation 138(1) of the Payment Services Regulations 2017 only to the extent that it was providing the payment service in the United Kingdom immediately before [F38 IP completion day] in accordance with the exercise of an EEA passport right under Title 5 of Directive (EU) 2015/2366 as in force immediately before [F38 IP completion day].]

[F40 (6) Where a person (“A”) to whom this paragraph applies issues electronic money to a person (“B”) in pursuance of a pre-existing contract in reliance on the exemption in sub-paragraph (1), A must, as soon as it is reasonably practicable to do so, notify B—

(a) that A is exempt from the prohibition in regulation 63(1) of EMR 2011 by virtue of sub-paragraph (1) and is not authorised by the FCA under EMR 2011;

(b) that, as a result of the United Kingdom's withdrawal from the European Union—

(i) it is possible that B's assets held by A in relation to the performance of the pre-existing contract no longer attract the same protection afforded to them immediately before IP completion day;

(ii) it is possible that recourse to an alternative dispute resolution procedure or compensation scheme that was available to B under the pre-existing contract immediately before IP completion day is no longer available;

(c) in so far as it is practicable to do so, of any changes arising as a result of the United Kingdom's withdrawal from the European Union to—

(i) the protection afforded to B's assets held by A in relation to the performance of the pre-existing contract; or

(ii) the availability to B of an alternative dispute resolution procedure or compensation scheme under the pre-existing contract.

(7) If at any time after A has provided B with any information under sub-paragraph (6)—

(a) there is, or is likely to be, a material change affecting that information; or

(b) it becomes apparent to the applicant that the information is incomplete or contains a material inaccuracy,

A must provide B with details of the change, the complete information or a correction of the inaccuracy (as the case may be) as soon as it is reasonably practicable to do so.

(8) The FCA may issue guidance in respect of compliance with an obligation under sub-paragraph (6) or (7).]

Textual Amendments

F37 Sch. 3 para. 12L(1) substituted (6.9.2019) by The Financial Services (Electronic Money, Payment Services and Miscellaneous Amendments) (EU Exit) Regulations 2019 (S.I. 2019/1212), regs. 1(2), 7(10)(a)

F38 Words in Sch. 3 para. 12L substituted (31.1.2020 immediately before exit day) by The Financial Services (Consequential Amendments) Regulations 2020 (S.I. 2020/56), regs. 1, 8(2)(k)

F39 Sch. 3 para. 12L(6) inserted (6.9.2019) by The Financial Services (Electronic Money, Payment Services and Miscellaneous Amendments) (EU Exit) Regulations 2019 (S.I. 2019/1212), regs. 1(2), 7(10)(b)

F40 Sch. 3 para. 12L(6)-(8) inserted (31.1.2020) by The Financial Services (Miscellaneous) (Amendment) (EU Exit) (No. 2) Regulations 2019 (S.I. 2019/1010), regs. 1(3), 7(3) (as amended by S.I. 2020/1301, regs. 1, 3, Sch. para. 44(b)(i)); 2020 c. 1, Sch. 5 para. 1(1)

Duration of extension period U.K.

12M.— (1) The Treasury may by regulations made by statutory instrument amend paragraph 12G so as to extend the extension period referred to in that paragraph, if the Treasury consider it necessary to do so.

(2) The Treasury may make regulations under sub-paragraph (1) only if, no later than 6 months before the end of the period to be increased, the FCA has submitted to the Treasury an assessment as to the effect of extending, or not extending, the period in paragraph 12G.

(3) Regulations under sub-paragraph (1) may not extend the period for the time being by more than 12 months.

(4) A statutory instrument containing regulations under sub-paragraph (1) is subject to annulment in pursuance of a resolution of either House of Parliament.]

PART 2 U.K. Transitional provisions relating to Payment Services Regulations 2017

Interpretation U.K.

13.  In this Part of this Schedule—

(a) “PSR 2017” means the Payment Services Regulations 2017,

(b) “the 2000 Act” means the Financial Services and Markets Act 2000,

(c) “the FCA” means the Financial Conduct Authority, and

(d) “EEA authorised payment institution”, “EEA registered account information service provider”, “home state competent authority”, “the money laundering directive”, “passport right”, and “the payment services directive” each has the meaning given by PSR 2017 as those Regulations have effect before the amendments made by Schedule 2.

Transitional authorisation for EEA authorised payment institution etc U.K.

14.—(1) This paragraph applies to a person who—

(a) immediately before [F41 IP completion day] is entitled to provide payment services in the United Kingdom in the exercise of a passport right,

(b) would (apart from this Part of this Schedule) cease from [F41 IP completion day] to be entitled to provide those services in the United Kingdom, and

(c) has notified the FCA in accordance with paragraph 15 that the person wishes this paragraph to apply in the person's case.

(2) During the transition period defined in paragraph 22—

(a) the person is to be taken—

(i) in case of a person who is an EEA authorised payment institution immediately before [F41 IP completion day], to be an authorised payment institution whose authorisation under PSR 2017 relates to the payment services mentioned in sub-paragraph (1)(a) and (b), or

(ii) in the case of a person who is an EEA registered account information service provider immediately before [F41 IP completion day], to be a registered account information service provider whose registration under PSR 2017 relates to those payment services, and

(b) accordingly, references in PSR 2017 to an authorised payment institution or a registered account information service provider are to be read as including a person who is taken by virtue of this paragraph to be an authorised payment institution or a registered account information service provider (as the case may be).

(3) Sub-paragraph (2) is subject to paragraphs 19 and 20.

(4) In the following provisions of this Part of this Schedule, “transitional authorisation” means authorisation by virtue of this paragraph as an authorised payment service provider or registration by virtue of this paragraph as a registered account information service provider.

Textual Amendments

F41 Words in Sch. 3 para. 14 substituted (31.1.2020 immediately before exit day) by The Financial Services (Consequential Amendments) Regulations 2020 (S.I. 2020/56), regs. 1, 8(2)(l)

Requirements to be met by notification U.K.

15.—(1) A notification for the purposes of paragraph 14(1)(c) must—

(a) be made in such manner as the FCA may direct, and

[F42 (b) be made during the period beginning with 28 December 2018 and ending with the day preceding the day on which IP completion day falls.]

(2) The notification must—

(a) state the name and address of the person making the notification, and any authorisation or reference number,

(b) specify the person's home state competent authority,

(c) specify a postal address in the United Kingdom to be used for correspondence,

(d) identify the payment services which the person is entitled to provide in the United Kingdom by virtue of being an EEA authorised payment institution or an EEA registered account information service provider for the purposes of PSR 2017,

(e) if, for the provision of the services in the United Kingdom, the person uses an agent who is registered with the home state competent authority, include the information referred to in regulation 34(3)(a) of PSR 2017,

(f) if the person uses or intends to use a branch in the United Kingdom to provide the services, state the names of those responsible for the management of the branch and details of its organisational structure,

(g) if the person has entered into a contract with another person under which that other person carries out or will carry out any operational function relating to the person's provision of payment services in the United Kingdom, include such information about that other person as the FCA may direct,

(h) specify any restrictions or conditions that have been imposed on the person by the person's home state competent authority, and

(i) specify any precautionary measures taken by the FCA under regulation 30(9) of PSR 2017 that are in force.

Textual Amendments

F42 Sch. 3 para. 15(1)(b) substituted (31.1.2020 immediately before exit day) by The Financial Services (Consequential Amendments) Regulations 2020 (S.I. 2020/56), regs. 1, 8(4)

Registration of agents U.K.

16.—(1) If a notification for the purposes of paragraph 14(1)(c) includes the information required by paragraph 15(2)(e) in relation to an agent, the FCA must, with effect from [F43 IP completion day] or as soon as practicable after that time, include the agent on the register maintained under regulation 4 of PSR 2017.

(2) A person to whom paragraph 14 applies may apply to the FCA under regulation 34 of PSR 2017 before [F43 IP completion day] for the registration at any time after [F43 IP completion day] of an agent not falling within sub-paragraph (1).

Textual Amendments

F43 Words in Sch. 3 para. 16 substituted (31.1.2020 immediately before exit day) by The Financial Services (Consequential Amendments) Regulations 2020 (S.I. 2020/56), regs. 1, 8(2)(m)

Requirements imposed by FCA U.K.

17.—(1) This paragraph applies in relation to a person to whom paragraph 14 applies.

(2) Any requirement which—

(a) was imposed on the person—

(i) as a precautionary measure under regulation 30(9) of PSR 2017, or

(ii) under section 196 of the 2000 Act as applied by paragraph 6 of Schedule 6 to PSR 2017, and

(b) has effect immediately before [F44 IP completion day],

is to continue to have effect at and after that time as if it were imposed by the FCA under regulation 7 of PSR 2017.

(3) The FCA may exercise its powers under regulation 7 of PSR 2017 in relation to the person if it appears to the FCA that, immediately before [F44 Sch. 3 para. 17], the condition in section 194(1)(a) or (b) of the 2000 Act, as applied by paragraph 6 of Schedule 6 to PSR 2017, was met.

Textual Amendments

F44 Words in Sch. 3 para. 17 substituted (31.1.2020 immediately before exit day) by The Financial Services (Consequential Amendments) Regulations 2020 (S.I. 2020/56), regs. 1, 8(2)(n)

Duties of person relying on transitional authorisation U.K.

18.—(1) This paragraph applies during the transition period defined in paragraph 22 to any person in relation to whom paragraph 14 applies.

(2) The person must notify the FCA of—

(a) any material change affecting any matter dealt with in the information contained in or accompanying the notification for the purposes of paragraph 14(1)(c),

(b) the cancellation or variation by the person's home state competent authority of the person's authorisation to provide payment services in accordance with the payment services directive,

(c) any regulatory action taken against the person by the person's home state competent authority, or

(d) any adverse judgments made against the person by the person's home state competent authority in pursuance of the money laundering directive.

(3) The person must when required by the FCA provide the FCA with such evidence as the FCA may reasonably require to demonstrate the person's compliance with the law of the person's home state implementing Article 10 of the payment services directive (safeguarding).

Exclusion of certain provisions of Payment Services Regulations 2017 U.K.

19.—(1) The following provisions of PSR 2017 do not apply in relation to a person while the person is by virtue of paragraph 14 an authorised payment institution or a registered account information service provider—

(a) regulation 10(1) (cancellation of authorisation);

(b) regulation 20 (duty to notify changes);

(c) regulation 22 and Schedule 3 (capital requirements);

(d) [F45 except where the person is subject to insolvency proceedings (as defined in regulation 23 of the PSR 2017) in the United Kingdom,] in regulation 23 (safeguarding requirements), paragraphs (14) to (16);

(e) regulation 24 (accounting and statutory audit);

(f) in Schedule 6 (application and modification of legislation), paragraph 5 (control over payment institutions) and paragraph 6 (incoming firms: intervention by FCA).

(2) Regulation 6 (conditions for authorisation) does not apply in relation to a person by virtue of the person's transitional authorisation, but applies in relation to [F46 any application for registration made by a person to whom paragraph 14(2)(a)(ii) applies] during the transition period defined in paragraph 22.

Textual Amendments

F45 Words in Sch. 3 para. 19(1)(d) inserted (6.9.2019) by The Financial Services (Electronic Money, Payment Services and Miscellaneous Amendments) (EU Exit) Regulations 2019 (S.I. 2019/1212), regs. 1(2), 7(11)(a)

F46 Words in Sch. 3 para. 19(2) substituted (6.9.2019) by The Financial Services (Electronic Money, Payment Services and Miscellaneous Amendments) (EU Exit) Regulations 2019 (S.I. 2019/1212), regs. 1(2), 7(11)(b)

Power of FCA to cancel transitional authorisation U.K.

20.—(1) The FCA may cancel a person's transitional authorisation and remove the person from the register where—

(a) the person's authorisation by the person's home state competent authority is cancelled,

(b) the person has failed to comply with the terms of the person's authorisation by the person's home state competent authority,

(c) the person does not provide payment services in the United Kingdom during the 12 months beginning with [F47 IP completion day],

(d) the person ceases to engage in business activity in the United Kingdom for more than six months,

(e) the person's notification for the purposes of paragraph 14(1)(c) contains false statements,

(f) the person lacks one or more of the following—

(i) robust governance arrangements for its payment service business, including a clear organisational structure with well-defined, transparent and consistent lines of responsibility,

(ii) effective procedures to identify, manage, monitor and report any risks to which the person might be exposed, and

(iii) adequate internal control mechanisms, including sound administrative, risk management and accounting procedures,

(g) any of the directors, or persons responsible for the management of the person's payment services, is not of good repute,

(h) the person does not have a business plan under which appropriate and proportionate systems, resources and procedures will be employed by the person to operate soundly,

(i) the person has not taken adequate measures for the purposes of safeguarding electronic money holders' funds in accordance with regulation 23 of PSR 2017,

(j) in the case of a person carrying on payment initiation services, the person does not hold professional indemnity insurance, or a comparable guarantee, of the kind mentioned in regulation 6(7)(e) of PSR 2017,

[F48 (ja) in the case of a person carrying on account information services, the person does not hold professional indemnity insurance, or a comparable guarantee, of the kind mentioned in regulation 6(7)(f) of PSR 2017,]

(k) the person would constitute a threat to the stability of, or trust in, a payment system by continuing the person's electronic money or payment services business,

(l) the cancellation is desirable in order to protect the interests of consumers, or

(m) the person's provision of payment services is otherwise unlawful, including where such provision of services in unlawful because the person's registration in a register maintained under regulation 54 or 55 of the Money Laundering, Terrorist Financing and Transfer of Funds (Information on the Payer) Regulations 2017 has been cancelled under regulation 60 of those Regulations.

(2) Regulation 10(2) to (5) of PSR 2017 apply in relation to cancellation under sub-paragraph (1) of this paragraph as they apply in relation to cancellation under regulation 10(1) of those Regulations.

Textual Amendments

F47 Words in Sch. 3 para. 20 substituted (31.1.2020 immediately before exit day) by The Financial Services (Consequential Amendments) Regulations 2020 (S.I. 2020/56), regs. 1, 8(2)(o)

F48 Sch. 3 para. 20(1)(ja) inserted (31.1.2020) by The Financial Services (Miscellaneous) (Amendment) (EU Exit) (No. 2) Regulations 2019 (S.I. 2019/1010), regs. 1(3), 7(4); 2020 c. 1, Sch. 5 para. 1(1)

Notice of intention U.K.

21.—(1) A person in relation to whom paragraph 14 applies must, before the end of the 12 months beginning with the day on which [F49 IP completion day] falls, notify the FCA—

(a) whether the person or a member of the person's immediate group, as defined by section 421ZA of the 2000 Act, intends to apply under regulation 5 or 17 of PSR 2017, and

(b) whether the person intends to cease at or before the end of the transition period to provide in the United Kingdom the services to which the transitional authorisation relates.

(2) The person must notify the FCA within a reasonable time of any change in an intention previously notified.

Textual Amendments

F49 Words in Sch. 3 para. 21 substituted (31.1.2020 immediately before exit day) by The Financial Services (Consequential Amendments) Regulations 2020 (S.I. 2020/56), regs. 1, 8(2)(p)

Transition period U.K.

22.—(1) The transition period in relation to a person is a period beginning with [F50 IP completion day] and ending with a day determined under this paragraph, or with any earlier day on which the cancellation under paragraph 20 of the person's transitional authorisation takes effect.

(2) In a case where a person has applied under regulation 5 of PSR 2017, on or after the date on which this regulation comes into force, for authorisation as a payment institution and has not withdrawn the application—

(a) if the application is granted, the person's transition period ends with the day before the day stated in accordance with regulation 9(6) of PSR 2017 as that on which the authorisation takes effect, and

(b) if the application is refused, the decision notice under regulation 9(8) of PSR 2017 must state the date on which the person's transition period is to end.

(3) In a case where a person has applied under regulation 17 of PSR 2017, on or after the date on which this regulation comes into force, for registration as an account information service provider and has not withdrawn the application—

(a) if the application is granted, the person's transition period ends with the day before the day stated in accordance with regulation 9(6) of PSR 2017 (as applied by regulation 15 of those Regulations) as that on which the authorisation takes effect, and

(b) if the application is refused, the decision notice under regulation 9(8) of PSR 2017 (as so applied) must state the date on which the person's transition period is to end.

(4) In any other case, the person's transition period ends at the end of the 3 years beginning with the day on which [F50 IP completion day] falls.

(5) The person may give notice to the FCA specifying a date (earlier than that determined under sub-paragraphs (2) to (4)) on which the person will cease to engage in new business covered by the person's transitional authorisation.

(6) The FCA may by notice to the person require the person to specify a date under sub-paragraph (5) before the end of a period specified in the notice, and if the person does not do so the FCA may itself specify a date on which the person's transitional authorisation will cease to cover new business.

Textual Amendments

F50 Words in Sch. 3 para. 22 substituted (31.1.2020 immediately before exit day) by The Financial Services (Consequential Amendments) Regulations 2020 (S.I. 2020/56), regs. 1, 8(2)(q)

Power to extend period specified in paragraph 22(4) U.K.

23.—(1) The Treasury may by regulations made by statutory instrument amend paragraph 22(4) so as to extend the period referred to in that provision, if the Treasury consider it necessary to do so.

(2) The Treasury may make regulations under sub-paragraph (1) only if, no later than 6 months before the end of the period to be extended, the FCA has submitted to the Treasury an assessment as to the effect of extending, or not extending, the period on persons (in general) to whom paragraph 14 applies.

(3) Regulations under sub-paragraph (1) may not extend the period for the time being by more than 12 months.

(4) A statutory instrument containing regulations under sub-paragraph (1) is subject to annulment in pursuance of a resolution of either House of Parliament.

Directions U.K.

24.  The power of the FCA to give directions under this Part of this Schedule includes power—

(a) to give different directions in relation to different notifications or categories of notification, and

(b) to vary or revoke a previous direction.

[F51 PART 3 U.K. Continuation of authorisation for limited purposes: Payment Services Regulations 2017

Textual Amendments

F51 Sch. 3 Pts. 3, 4 inserted (1.3.2019) by The Financial Services Contracts (Transitional and Saving Provision) (EU Exit) Regulations 2019 (S.I. 2019/405), regs. 1(2), 10(3)

Interpretation U.K.

25.   The interpretative provisions in paragraph 13 apply also for the purposes of this Part of this Schedule.

Continued authorisation for limited purposes U.K.

26.— (1) This paragraph applies to a person in relation to whom the [F52 IP completion day] conditions or the transitional authorisation conditions are satisfied.

(2) The “[F52 IP completion day] conditions”, in relation to a person, are—

(a) that immediately before [F52 IP completion day] the person was providing payment services through a branch or agent in the United Kingdom in the exercise of a passport right—

(i) as an EEA authorised payment institution, or

(ii) as an EEA registered account information service provider,

(b) that immediately after [F52 IP completion day] the person is not (apart from under this Part of this Schedule) an authorised payment institution or a registered account information service provider, and

(c) that immediately after [F52 IP completion day] the person has outstanding obligations under contracts which the person entered into as an EEA authorised payment institution or an EEA registered account information service provider exercising passport rights.

(3) The “transitional authorisation conditions”, in relation to a person, are—

(a) that on [F52 IP completion day] the person became authorised to provide payment services in the United Kingdom by virtue of paragraph 14,

(b) that the person has provided any such services in the United Kingdom either—

(i) before [F52 IP completion day], in the exercise of a passport right as an EEA authorised payment institution or an EEA registered account information service provider, or

(ii) on or after [F52 IP completion day], in accordance with paragraph 14, and

(c) that immediately after the end of that period the person has outstanding obligations under contracts which the person entered into through branch or agent in the United Kingdom as an EEA authorised payment institution or an EEA registered account information service provider exercising passport rights.

(4) During the extension period defined in paragraph 31—

(a) a person to whom this paragraph applies is to be taken—

(i) in the case of a person who was an EEA authorised payment institution, to be an authorised payment institution whose authorisation under regulation 6 of PSR 2017 relates to the permitted services specified in paragraph 29, or

(ii) in the case of a person who was an EEA registered account information service provider, to be a registered account information service provider whose registration under regulation 18 of PSR 2017 relates to the permitted services specified in paragraph 29;

(b) accordingly, references in PSR 2017 to an authorised payment institution or a registered account information service provider are to be read as including a person who is taken by virtue of this paragraph to be an authorised payment institution or a registered account information service provider (as the case may be).

[F53 (c) a requirement imposed by a home state competent authority and which has effect immediately before [F52 IP completion day] continues to have effect on and after that day as if it were imposed by the FCA under regulation 7 of the PSR 2017 insofar as it could be imposed by the FCA under that regulation.]

(5) Sub-paragraph (4) is subject to paragraphs 27(4), 32 and 33.

(6) In this paragraph reference to providing services at a particular time includes where the performance of a pre-existing contract requires, or may require, a service to be provided at another time.

Textual Amendments

F52 Words in Sch. 3 para. 26 substituted (31.1.2020 immediately before exit day) by The Financial Services (Consequential Amendments) Regulations 2020 (S.I. 2020/56), regs. 1, 8(2)(r)

F53 Sch. 3 para. 26(4)(c) inserted (6.9.2019) by The Financial Services (Electronic Money, Payment Services and Miscellaneous Amendments) (EU Exit) Regulations 2019 (S.I. 2019/1212), regs. 1(2), 7(12)

Duty to notify FCA U.K.

27.— (1) A person to whom paragraph 26 or 36 applies must notify the FCA of that fact as soon as reasonably practicable, and in any event not later than one month after the person first becomes aware of an obligation to perform a pre-existing contract.

(2) In this Part of this Schedule a “pre-existing contract”, in relation to a person to whom paragraph 26 applies, means a contract—

(a) which was entered into before the extension period defined in paragraph 31 through an agent or branch in the United Kingdom, and

(b) under which the person is obliged to provide payment services.

(3) Notification under sub-paragraph (1) must be made in such manner, and be accompanied by such information, as the FCA may direct.

(4) The FCA is not obliged to include a person to whom paragraph 26 applies on the register maintained under regulation 4 of PSR 2017 until the person notifies the FCA under sub-paragraph (1).

(5) During the extension period defined in paragraph 31, a person to whom paragraph 26 applies must notify the FCA of any of the matters mentioned in paragraph 18(2)(b) to (d).

Agents U.K.

28.   If a notification under paragraph 27 includes information as to the use of an agent who is registered with the home state competent authority, the FCA must include the agent on the register maintained under regulation 4 of PSR 2017.

Permitted services U.K.

29.— (1) This paragraph sets out the permitted services for the purposes of paragraph 26(4)(a).

(2) The permitted services are—

(a) where the [F54 IP completion day] conditions in paragraph 26(2) are met, payment services of the kind mentioned in paragraph 26(2)(a), but only to the extent that the provision of the services is necessary to enable the person to whom paragraph 26 applies to perform a pre-existing contract, or

(b) where the transitional authorisation conditions in paragraph 26(3) are met, payment services of the kind mentioned in paragraph 26(3)(b)(i) or (ii), but only to the extent that the provision of the services is necessary to enable the person to whom paragraph 12B applies to perform a pre-existing contract.

(3) If a pre-existing contract is varied by agreement for the purpose of complying with regulatory requirements or reducing a risk to the person to whom paragraph 26 applies, but without extending the duration of the contract or materially altering its commercial effect, the contract as varied remains a pre-existing contract.

(4) The FCA may, on an application made before the end of the extension period by a person to whom paragraph 26 applies, approve a plan (a “wind-down plan”) under which new contracts may be entered into for the purposes of the orderly winding down of the person’s business of providing payment services in the United Kingdom.

(5) If a wind-down plan is approved by the FCA, the permitted services include services provided in accordance with the wind-down plan.

(6) A person providing permitted services in accordance with this paragraph must, when required by the FCA, provide the FCA with such evidence as the FCA may reasonably require to demonstrate the person’s compliance with the law of the person’s home state implementing Article 10 of the payment services directive (safeguarding).

Textual Amendments

F54 Words in Sch. 3 para. 29 substituted (31.1.2020 immediately before exit day) by The Financial Services (Consequential Amendments) Regulations 2020 (S.I. 2020/56), regs. 1, 8(2)(s)

Notification that authorisation no longer required U.K.

30.— (1) A person to whom paragraph 26 applies and who has notified the FCA under paragraph 27(1) must notify the FCA once it no longer has obligations under pre-existing contracts.

(2) On receiving a notification under sub-paragraph (1), the FCA must, if satisfied that the person giving the notification no longer has obligations under pre-existing contracts—

(a) notify the person of the date on which the person will cease to be an authorised payment institution, or a registered account information service provider, by virtue of this Part of this Schedule, and

(b) remove the person from the register from that date.

F55 (3) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Textual Amendments

F55 Sch. 3 para. 30(3) omitted (6.9.2019) by virtue of The Financial Services (Electronic Money, Payment Services and Miscellaneous Amendments) (EU Exit) Regulations 2019 (S.I. 2019/1212), regs. 1(2), 7(13)

Extension period U.K.

31.— (1) The extension period in relation to a person begins—

(a) where the [F56 IP completion day] conditions are met, with the day on which [F56 IP completion day] falls, and

(b) where the transitional authorisation conditions are met, with the end of the transition period defined by paragraph 22.

(2) The extension period in relation to a person ends with the earliest of the following—

(a) the day before the date stated in accordance with regulation 9(6) of PSR 2017 (or that provision as applied by regulation 15 of those Regulations) as the date on which the person’s authorisation as a payment institution or registration as an account information service provider (otherwise than by virtue of this Schedule) takes effect;

(b) the day on which the transfer to another person of the person’s business of providing payment services in the United Kingdom takes effect;

(c) in a case where the person has notified the FCA under paragraph 27(1), the day determined by the FCA under paragraph 29(2);

(d) in a case where the person has not notified the FCA under paragraph 27(1), the time when all the person’s obligations under relevant contracts have been discharged;

(e) the day on which any cancellation under paragraph 33 takes effect;

(f) the day the person ceases to be authorised by its home state competent authority;

(g) the end of the period of 5 years beginning with the day on which the extension period began.

[F57 (3) “Relevant contract”, in relation to a person to whom paragraph 26 applies, means a contract—

(a) which—

(i) is a pre-existing contract; or

(ii) was entered into in accordance with a wind-down plan approved by the FCA under paragraph 29(4); and

(b) under which the person is obliged to issue electronic money or provide payment services.]

Textual Amendments

F56 Words in Sch. 3 para. 31 substituted (31.1.2020 immediately before exit day) by The Financial Services (Consequential Amendments) Regulations 2020 (S.I. 2020/56), regs. 1, 8(2)(t)

F57 Sch. 3 para. 31(3) substituted (6.9.2019) by The Financial Services (Electronic Money, Payment Services and Miscellaneous Amendments) (EU Exit) Regulations 2019 (S.I. 2019/1212), regs. 1(2), 7(14)

[F58 Supervision and enforcement of persons to whom paragraph 26 applies U.K.

32.— (1) In relation to a person to whom paragraph 26 applies, the provisions of the PSR 2017 (other than those disapplied by paragraph 19(1)) apply while the person is an authorised payment institution by virtue of paragraph 26(4)(a)(i) or a registered account information service provider by virtue of paragraph 26(4)(a)(ii).

(2) Paragraph 19(2) applies to that person as if the reference—

(a) to a person’s transitional authorisation were a reference to authorisation by virtue of paragraph 26(4)(a);

(b) to the transition period is a reference to the extension period in paragraph 31.

Textual Amendments

F58 Sch. 3 paras. 32, 32A substituted for Sch. 3 para. 32 (6.9.2019) by The Financial Services (Electronic Money, Payment Services and Miscellaneous Amendments) (EU Exit) Regulations 2019 (S.I. 2019/1212), regs. 1(2), 7(15)

Supervision and enforcement of persons to whom paragraph 36 applies U.K.

32A.— (1) The following sub-paragraphs apply in relation to a person to whom paragraph 36 applies.

(2) Sections 165, 166, 175 and 177 of the 2000 Act, as modified by paragraph 4 of Schedule 6 to the PSR 2017, apply as if the references to a payment service provider were to a person who is exempt from the prohibition in regulation 138(1) of those Regulations by virtue of paragraph 36.

(3) If the FCA considers that a person—

(a) has not notified the FCA in accordance with paragraph 27; or

(b) has acted in a manner which the FCA considers contrary to the advancement of its objectives under the PSR 2017 or the 2018 Regulations,

the FCA may publish a statement to that effect.

(4) The procedure in regulation 112 of the PSR 2017 applies to the publication of a statement under sub-paragraph (3) as if the references to regulation 110 were references to this paragraph.

(5) Section 393(4) of the 2000 Act applies to notices issued in accordance with this paragraph in the same way as it applies to notices issued in accordance with regulation 53 in relation to the publication of statements under regulation 110 of the PSR 2017 by virtue of paragraph 10 of Schedule 6 to the PSR 2017.

(6) The FCA may, if it considers it appropriate to do so, publish information provided under paragraph 27 in respect of a person.

(7) Publication under sub-paragraph (6) is to be in such a manner as the regulator considers appropriate.]

Textual Amendments

F58 Sch. 3 paras. 32, 32A substituted for Sch. 3 para. 32 (6.9.2019) by The Financial Services (Electronic Money, Payment Services and Miscellaneous Amendments) (EU Exit) Regulations 2019 (S.I. 2019/1212), regs. 1(2), 7(15)

Variation and cancellation of authorisation U.K.

33.— (1) In respect of a person to whom paragraph 26 applies, the FCA may—

(a) cancel the person’s authorisation by virtue of that paragraph as an authorised payment institution or a registered account information service provider, or

(b) limit the permitted services to which the authorisation relates.

(2) The FCA may only exercise the power in sub-paragraph (1) where—

(a) the person’s authorisation by the person’s home state competent authority is cancelled,

(b) the person has failed to comply with the terms of the person’s authorisation by the person’s home state competent authority,

(c) the person does not provide payment services in the United Kingdom during the 12 months beginning with [F59 IP completion day],

(d) the person ceases to engage in business activity in the United Kingdom for more than six months,

(e) the person’s notification under paragraph 27 contains false statements,

(f) the person has not taken adequate measures for the purposes of safeguarding electronic money holders’ funds in accordance with regulation 23 of PSR 2017 [F60 and the Electronic Money, Payment Services and Payment Systems (Amendment and Transitional Provisions) (EU Exit) Regulations 2018],

(g) the person would constitute a threat to the stability of, or trust in, a payment system by continuing the person’s electronic money or payment services business,

(h) the cancellation is desirable in order to protect the interests of payment service users, or

(i) the person’s provision of payment services is otherwise unlawful, including where such provision of services in unlawful because the person’s registration in a register maintained under regulation 54 or 55 of the Money Laundering, Terrorist Financing and Transfer of Funds (Information on the Payer) Regulations 2017 has been cancelled under regulation 60 of those Regulations.

Textual Amendments

F59 Words in Sch. 3 para. 33 substituted (31.1.2020 immediately before exit day) by The Financial Services (Consequential Amendments) Regulations 2020 (S.I. 2020/56), regs. 1, 8(2)(u)

F60 Words in Sch. 3 para. 33(2)(f) inserted (6.9.2019) by The Financial Services (Electronic Money, Payment Services and Miscellaneous Amendments) (EU Exit) Regulations 2019 (S.I. 2019/1212), regs. 1(2), 7(16)

Variation and cancellation: procedure U.K.

34.— (1) If the FCA proposes to exercise the power in paragraph 33 or 36(3) in relation to a person, it must give the person a warning notice.

(2) If the FCA decides to exercise the power in paragraph 33 or 36(3) in relation to a person, it must give the person a decision notice.

(3) Part 26 of the 2000 Act (notices) applies to a notice under sub-paragraph (1) or (2) as it applies (by virtue of Schedule 6 to PSR 2017) in relation to a notice under PSR 2017.

(4) A person in respect of whom the power in paragraph 33 or 36(3) is exercised may refer the decision to exercise the power to the Upper Tribunal.

(5) Part 9 of the 2000 Act (hearings and appeals) applies to a reference to the Upper Tribunal under sub-paragraph (4) as it applies (by virtue of Schedule 6 to PSR 2017) in relation to a reference under PSR 2017.

Power to charge fees U.K.

35.— (1) The FCA may make rules providing for the payment to it of fees in connection with the discharge of a function under this Part of this Schedule.

(2) Rules under sub-paragraph (1) may not provide for the payment of a fee greater than an amount equal to the expenses incurred, or expected to be incurred, in the discharge of the function.

(3) Sections 138F to 138O of the 2000 Act (procedural provisions) apply to rules made under sub-paragraph (1) as they apply to rules made by the FCA under the 2000 Act.

Exemption from prohibition U.K.

36.— (1) A person to whom this paragraph applies is exempt from the prohibition in regulation 138(1) of PSR 2017, for a period of five years beginning with [F61 IP completion day], but only to the extent that it is necessary for the person to provide payment services in the United Kingdom to perform a pre-existing contract.

(2) This paragraph applies to an EEA authorised payment institution or an EEA registered account information service provider exercising its passport rights in the United Kingdom immediately before [F61 IP completion day] other than through a branch in the United Kingdom or a UK-based agent.

[F62 (2A) A person to whom this paragraph applies is exempt from the prohibition in regulation 138(1) of the PSR 2017 only to the extent that it was providing the payment service in the United Kingdom immediately before [F61 IP completion day] in accordance with the exercise of an EEA passport right under article 3(1) of Directive 2009/110/EC as in force immediately before [F61 IP completion day].]

(3) The FCA may cancel the exemption of a person to whom this paragraph applies, or direct that paragraph 26 is to apply to the person, if it considers that doing so is necessary—

(a) for the prevention, detection, investigation or prosecution of a criminal offence;

(b) for the protection of payment service users; or

(c) for the protection of trust in, or the stability of, a payment system.

(4) In exercising the power in paragraph (3), the FCA must take into account—

(a) the person’s conduct,

(b) the practicality of supervision by the FCA,

(c) the size of the person’s undertaking, and

(d) the nature or the services person provides.

(5) Paragraph 4 of Schedule 5 to PSR 2017 has effect in relation to the exercise of the FCA’s powers under this paragraph.

[F63 (6) Where a person (“A”) to whom this paragraph applies provides payment services to a person (“B”) in pursuance of a pre-existing contract in reliance on the exemption in sub-paragraph (1), A must, as soon as it is reasonably practicable to do so, notify B—

(a) that A is exempt from the prohibition in regulation 138(1) of PSR 2017 by virtue of sub-paragraph (1) and is not authorised by the FCA under PSR 2017;

(b) that, as a result of the United Kingdom's withdrawal from the European Union—

(i) it is possible that B's assets held by A in relation to the performance of the pre-existing contract no longer attract the same protection afforded to them immediately before IP completion day;

(ii) it is possible that recourse to an alternative dispute resolution procedure or compensation scheme that was available to B under the pre-existing contract immediately before IP completion day is no longer available;

(c) in so far as it is practicable to do so, of any changes arising as a result of the United Kingdom's withdrawal from the European Union to—

(i) the protection afforded to B's assets held by A in relation to the performance of the pre-existing contract; or

(ii) the availability to B of an alternative dispute resolution procedure or compensation scheme under the pre-existing contract.

(7) If at any time after A has provided B with any information under sub-paragraph (6)—

(a) there is, or is likely to be, a material change affecting that information; or

(b) it becomes apparent to the applicant that the information is incomplete or contains a material inaccuracy,

A must provide B with details of the change, the complete information or a correction of the inaccuracy (as the case may be) as soon as it is reasonably practicable to do so.

(8) The FCA may issue guidance in respect of compliance with an obligation under sub-paragraph (6) or (7).]

Textual Amendments

F61 Words in Sch. 3 para. 36 substituted (31.1.2020 immediately before exit day) by The Financial Services (Consequential Amendments) Regulations 2020 (S.I. 2020/56), regs. 1, 8(2)(v)

F62 Sch. 3 para. 36(2A) inserted (6.9.2019) by The Financial Services (Electronic Money, Payment Services and Miscellaneous Amendments) (EU Exit) Regulations 2019 (S.I. 2019/1212), regs. 1(2), 7(17)

F63 Sch. 3 para. 36(6)-(8) inserted (31.1.2020) by The Financial Services (Miscellaneous) (Amendment) (EU Exit) (No. 2) Regulations 2019 (S.I. 2019/1010), regs. 1(3), 7(5) (as amended by S.I. 2020/1301, regs. 1, 3, Sch. para. 44(b)(ii)); 2020 c. 1, Sch. 5 para. 1(1)

Duration of extension period U.K.

37.— (1) The Treasury may by regulations made by statutory instrument amend paragraph 31 so as to extend the extension period referred to in that paragraph, if the Treasury consider it necessary to do so.

(2) The Treasury may make regulations under sub-paragraph (1) only if, no later than 6 months before the end of the period to be increased, the FCA has submitted to the Treasury an assessment as to the effect of extending, or not extending, the period in paragraph 12G.

(3) Regulations under sub-paragraph (1) may not extend the period for the time being by more than 12 months.

(4) A statutory instrument containing regulations under sub-paragraph (1) is subject to annulment in pursuance of a resolution of either House of Parliament.

PART 4 U.K. Supplementary provision

38.— (1) The reference in regulation 61 of the Electronic Money Regulations 2011 (FCA’s indemnity from liability in damages) to the functions of the FCA under those Regulations is to be read as including a reference to its functions under Parts 1 and 1A of this Schedule. U.K.

(2) The reference in regulation 121 of the Payment Services Regulations 2017 (FCA’s indemnity from liability in damages) to the functions of the FCA under those Regulations is to be read as including a reference to its functions under Parts 2 and 3 of this Schedule.

(3) “The FCA” means the Financial Conduct Authority.]

Explanatory Note

(This note is not part of the Regulations)

These Regulations are made in exercise of the powers in section 8(1) of the European Union (Withdrawal) Act 2018 (c. 16) in order to address failures of retained EU law to operate effectively and other deficiencies (in particular under paragraphs (a), (b), (c), (e), (f) and (g) of section 8(2)) arising from the withdrawal of the United Kingdom from the European Union.

Regulation 2 and Schedule 1 amend primary legislation relating to payment systems.

Regulation 3(1) and Schedule 2 amend subordinate legislation relating to electronic money and payment services.

Regulation 3(2) and Schedule 3 makes provision for persons who before exit day are authorised to issue electronic money or provide payment services in the United Kingdom to continue to do so during a transition period if they notify the Financial Conduct Authority of their intention to do so.

An impact assessment of the effect that this instrument, and certain other instruments made by HM Treasury under the European Union (Withdrawal) Act 2018, will have on the costs of business, the voluntary sector and the public sector is available from HM Treasury, 1 Horse Guards Road, London SW1A 2HQ and is published alongside this instrument at www.legislation.gov.uk.