Payments regulatory news, 7 December 2020

Contents

• Download the full regulatory news bulletin
• UK payment systems: Pay.UK recommendations for adopting ISO 20022
• Systemically important payment systems: ECB consults on revisions to oversight requirements
• EPC SEPA request-to-pay scheme rulebook
• Enhancing cross-border payments: FATF survey

UK payment systems: Pay.UK recommendations for adopting ISO 20022

Pay.UK published a report containing conclusions and recommendations relating to adopting the common global messaging standard for UK payments, known as ISO 20022, along with other key standards for the clearing and settlement capability that will be enabled by the New Payments Architecture (NPA).

The report is relevant to developers of ISO 20022 messages, service and solution providers, and end users (businesses, charities, and individuals). It provides a statement of Pay.UK's intentions regarding the implementation of the UK retail standard, what it has already started doing, and its plan for the next 18 months, focusing on:

• the recommended direction for implementing ISO 20022 to enable the core clearing and settlement capability of the NPA;
• foundational technical details for the ISO 20022 message standard, including Pay.UK's technical design and ISO 20022 readiness approach; and
• future direction on concepts that require a degree of standardisation across the payments ecosystem.

Systemically important payment systems: ECB consults on revisions to oversight requirements

The European Central Bank (ECB) has published a consultation on amendments to the Regulation on oversight requirements for systemically important payment systems (the SIPS Regulation) and two implementing ECB Decisions. The SIPS Regulation sets out the oversight requirements for both large-value and retail payment systems of systematic importance. It applies to payment systems operated both by central banks and by private operators.

The consultation is on draft versions of:

• a Regulation amending the SIPS Regulation on oversight requirements for SIPS;
• a Decision amending Decision (EU) 2017/2098 on procedural aspects concerning the imposition of corrective measures for non-compliance with the SIPS Regulation; and
• a Decision amending Decision (EU) 2019/1349 on the procedure and conditions for exercise by a competent authority of certain powers in relation to oversight of SIPS.

The consultation closes on 8 January 2021.

EPC SEPA request-to-pay scheme rulebook

Following its consultation, the European Payments Council (EPC) has published the first version of the Single European Payments Area (SEPA) Request-To-Pay (RTP) scheme rulebook. The rulebook covers the set of operating rules and technical elements that allow a payee to request the initiation of a payment from a payer in a range of physical or online use cases. The effective date of the first release is 15 June 2021.

An EPC press release gives some important dates related to the new scheme and its maintenance cycle:

• implementation guidelines relating to the rulebook are due to be published in January 2021;
• change requests relating to the rulebook should be submitted to the EPC by 26 February 2021;
• the EPC is expected to launch a request for proposal relating to the certification of applicants in February 2021;
• the scheme adherence process is due to open in May 2021; and
• a second version of the rulebook, which will support more functionality, is due to be published in November 2021.

Enhancing cross-border payments: FATF survey

The Financial Action Task Force (FATF) has published a survey on enhancing cross-border payments.

The FATF explains that cross-border payment services generally face four main challenges: high cost, low speed, limited access for users and payment service providers (PSPs) and limited transparency. The FATF notes that a number of factors contribute to these challenges, including divergent national anti-money laundering (AML) and counter-terrorist financing (CTF) measures. Identifying what works well and what needs to be improved is key to finding solutions to the challenges. This is why the FATF, in collaboration with the Basel Committee on Banking Supervision (BCBS), has developed on online questionnaire.

The aim of the questionnaire is to gather information from the private sector about these challenges and possible ways to address them without compromising AML and CTF safeguards. In particular, the FATF wants information to help it identify areas of divergence in how jurisdictions have implemented customer due diligence (CDD) and other measures stemming from its AML and CTF standards. It gives the examples of inconsistent customer identity documents or sanctions screening requirements across different jurisdictions. However, the FATF recognises that some differences may be necessary or justified based on different underlying risks or different legal systems.

The FATF is seeking feedback from PSPs, banks, FinTech companies, money or value transfer service providers and others. Completed questionnaires can be submitted until 15 January 2021.

In the second phase of the project, the FATF will consider how to reduce the identified challenges by clarifying or updating its standards using various options available. These include amending the standards, issuing further guidance or best practice papers, or convening national authorities in a co-ordination body. However, the FATF does not presume that its standards will need amending.

Download the full regulatory news bulletin 

Authored by Yvonne Clapham