Call to action: PSPs can shape post-PSD2 guidance in latest FCA consultation

The consultation is a chance for payment service providers to get involved and help to create guidance that is fit for purpose in this rapidly changing market, Hogan Lovells says.

The Financial Conduct Authority (FCA) today published a consultation on proposed updates to reflect PSD2 to:

  • its Payment Services Approach Document;
  • Handbook (including the Banking: Conduct of Business sourcebook BCOBS); and
  • Perimeter Guidance Manual (PERG),

Roger Tym, partner in Hogan Lovells' Financial Institutions Sector, said:

"Given the lack of clarity in several key provisions of both PSD2 and the EBA's "final" draft Regulatory Technical Standards on strong customer authentication, the revised FCA guidance has been eagerly awaited by the payments industry. Following publication of draft implementing regulations by HM Treasury in February 2017, this latest consultation is another important step towards UK implementation of PSD2.

"It is important that payment service providers are given as much certainty as possible as soon as possible in the already too short period before implementation.  It is equally important that the final form Approach Document is fit for purpose in this rapidly changing market. PSPs need to engage with the FCA during the consultation period to ensure that it fully understands new technologies and business models.

"PSPs will also want to make sure that any updates to the FCA's approach do not inadvertently call existing practices into question."

Following industry feedback to its 2016 Call for Input on the current guidance, the FCA's proposals in its draft revised Approach Document also:

  • Combine FCA guidance on payment services and e-money into one document
  • Provide clarifications on existing guidance as well as new guidance on dealing with legislative and regulatory changes introduced since publication of the current Approach Document, including UK implementation of the Payment Accounts Directive
  • Take into account amendments for recent technological and other market developments, such as new technologies and business models

The proposals also cover new directions for providers of excluded services.

The Payment Systems Regulator has also published a separate draft Approach Document on the aspects of the draft UK implementing regulations, the Payment Services Regulations 2017 (PSRs 2017), for which it is solely responsible, including access to payment systems and payment account services and information to be provided by independent ATM deployers.

The consultation for both Approach Documents is being co-ordinated through the FCA and closes on 8 June 2017. The FCA intends to publish its final rules and revised Approach Document in a Policy Statement in Q3 2017, after HM Treasury finalises the PSRs 2017, so that it can take into account any further changes to the implementing legislation.

The FCA's proposed changes would take effect from 13 January 2018, unless stated otherwise in the consultation paper.

A further FCA consultation on matters related to the EBA mandates under PSD2 (such as the Regulatory Technical Standard on strong customer authentication and common and secure open standards of communication) will be issued in mid-2017 and the proposals finalised in autumn 2017, subject to progress on the various EBA workstreams.

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