News

Payments regulatory news, 9 November 2020

FIG Bulletin

09 November 2020

Recent regulatory developments focussed on the payments sector. See also our General regulatory news in the Related Materials links.

PSD2: EBA proposes changes to Guidelines on major incident reporting after latest review

Following the European Banking Authority's (EBA's) latest required review of its July 2017 Guidelines on major incident reporting under PSD2, it is consulting on some specific proposals, including changes to reporting thresholds and criteria to improve accuracy in the results and improvements to the reporting process to facilitate compliance by PSPs. The revised Guidelines are expected to come into force on 1 October 2021.

With the end of the post-Brexit transition period fast approaching, the UK Financial Conduct Authority (FCA) has recently confirmed that its "supervisory expectation in respect of [European Supervisory Authorities (ESA)] Guidelines and Recommendations remains the same" unless it has notified the relevant ESA otherwise. The FCA will consider new or updated guidance issued after the end of the transition period and, where appropriate, set out expectations as to how it should be treated. Firms should therefore expect to be told by the FCA if they need to comply with the updated version of these Guidelines once published.

Read more in our separate insight article here.

Global Payments Newsletter: October 2020

We have published our latest Global Payments Newsletter for October 2020. Key developments of interest reported in this edition include:

Europe: The European Commission has published a communication setting out an EU Retail Payments Strategy;
France: The French Observatory for the Security of Payment Means has published its Annual Report for 2019; and
United Kingdom: HM Treasury has published a call for evidence on access to cash, seeking views to feed into legislative work in this area.

ISO 20022 migration: BoE revised approach and final schemas

The Bank of England (BoE) has published a document setting out the revised approach and final enhanced schemas for ISO 20022 migration.

This is the new baseline document for all the BoE's ISO 20022-related documentation. It should be used by stakeholders, including CHAPS direct participants, real-time gross settlement (RTGS) account holders and technology providers, as a handbook and for reference as part of ISO 20022 migration. It supersedes previously published BoE ISO 20022 documents in which the BoE consulted on its plans and updated stakeholders on progress.

The BoE expects that ongoing changes will be required to meet future end-user requirements and to maintain alignment with international best practice. Section 5 of the document sets out its initial change management framework, which will allow ISO 20022 users to submit change requests to the CHAPS ISO 20022 messages, the process for which is outlined in Annex B.

The BoE has also updated its webpage on ISO 20022. It explains that the final CHAPS ISO 20022 schemas (that is, enhanced messages), technical guidance and change log are available on MyStandards (which requires a login to the swift.com user account). The BoE has incorporated feedback received from stakeholders following its July 2020 industry review of the draft enhanced schemas, and includes feedback from the industry review in Annex A.

Consumer protections in payments: Pay.UK paper

Pay.UK has published a paper providing an overview of the UK consumer protection landscape relating to disputed transactions. The paper includes a summary of findings and insights from secondary research on the evolving payments and consumer protection landscape and regulatory perspectives. It also discusses consumer perceptions and a global perspective on consumer protection. The paper concludes with next steps, including Pay.UK's ongoing primary research project focusing on consumer perception of consumer protection. This research will be fed into Pay.UK's policy work on the topic, which is expected to follow by the end of 2020.

Participation of non-EEA countries in SEPA Schemes: EPC criteria

The European Payments Council (EPC) has published a document setting out criteria for participation in the Single Euro Payments Area (SEPA) Schemes for communities of banks or financial institutions outside the European Economic Area (EEA).

2019 SEPA scheme rulebooks: EPC further update

The EPC has announced further updates (version 1.2) to its 2019 SEPA scheme rulebooks:

The EPC has also published an updated version of the document Maximum amount for instructions under the SCT Inst Scheme Rulebook (version 1.3). A related webpage explains that this document sets the maximum amount per instruction that can be processed under the SCT Inst scheme, based on the 2019 SCT Inst Rulebook (version 1.2), to which it forms a binding supplement.

Version 1.2 of each 2019 payment scheme rulebook includes an updated section 5.4 which states, among other things, the relevant authorisation and regulatory requirements for payment service providers from countries outside the EEA. This follows the extension of the geographical scope of the payment schemes to include Andorra and the Vatican City State (the EPC List of SEPA Scheme Countries (version 3.0) has been updated accordingly). It also covers the end of the transitional period for the UK leaving the EU on 31 December 2020.

Version 1.2 of each 2019 payment scheme rulebook is in force from 1 December 2020 until 21 November 2021.

Electronic payment instruments, schemes and arrangements: ECB consults on draft Eurosystem oversight framework

The European Central Bank (ECB) has published:

a consultation paper on the draft Eurosystem oversight framework for electronic payment instruments, schemes and arrangements (PISA framework). It replaces the "Harmonised oversight approach and oversight standards for payment instruments" and all related oversight frameworks for cards, direct debits, credit transfers and the security objectives for e-money. It is the result of a comprehensive review considering regulatory and technological developments in recent years, as well as the experience gained by the Eurosystem in the oversight of payment schemes and payment instruments;
a consultation paper on the draft Eurosystem assessment methodology for electronic payment instruments, schemes and arrangements, which complements the PISA framework. The underlying methodology is based on the ECB's revised assessment methodology for payment systems, which was published in June 2018;
a consultation paper on the draft exemption policy for the PISA framework. The policy defines the criteria used to identify the payment schemes and arrangements overseen by the Eurosystem and those which are exempt, taking into account their relevance for the overall payment system. The exemption criteria and their respective thresholds aim to be proportionate to the risks introduced by small and emerging payment schemes and arrangements and, therefore, exempt payment schemes and arrangements that do not meet the defined criteria and thresholds. The Eurosystem will review this policy at least every three years to ensure it is line with market developments and experience gained over the period.

The consultations close on 31 December 2020.