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News - 10 October 2013

UK payments industry to have regulator


The Government has announced a new regulator that will be appointed to oversee competitiveness in the UK payments industry.

The new Payment Systems Regulator will be established by the Financial Conduct Authority (FCA) and operate under it, albeit as a separate body.

The operator of payment systems, those providing the payment systems infrastructure and any provider of payment services will be subject to the new regulatory regime. Under the proposed reforms, the Treasury would have the power to designate payment systems for regulation.

However, plans to create a licensing regime for companies involved in payment systems have been scrapped.

Tonmoy Kumar, Manager of the Accounts Department of ABDS comments:
“Under the new legislation, the Payment Systems Regulator would be obliged to "promote effective competition" in the UK payments market and "the markets for services provided by payment systems" in the interests of end users. The power to establish the new regulator is included within amendments added to the Financial Services (Banking Reform) Bill, which is currently progressing through Parliament.”

The Payment Systems Regulator would have broad power to direct companies involved in a regulated payment system to take, or ban, "specified action in relation to the system" and "set standards to be met in relation to the system".

Operators of regulated payment systems could also be required to adhere to establish rules for the operation of the system and may also be required to permit individual payment service providers access to the system, both at the behest of the regulator.

Companies that fail to adhere to the new regulatory framework could be issued with fines by the new regulator, and in extreme cases could face a court injunction barring them from "dealing with any assets which it is satisfied the participant or person is reasonably likely to deal with" when their non-compliance with the new framework is determined

The Treasury has stated that The Payment Systems Regulator's powers are expected to be introduced under law late next year and the body is expected to be "fully operational by spring 2015".

For those who are looking for a more personal approach on a range of issues, including Business strategy, business recovery, sale or acquisition, VAT and all other tax strategies, contact us at ABDS.

ABDS Chartered Certified Accountants of Southampton.
Tel: 023 8083 6900  E-mail: abds@netaccountants.net

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