By Kai Zhang, Special Counsel, London
Changes are coming to the UK payment services regulatory landscape post-Brexit (from 1 January 2021). However, certain Brexit-triggered changes have been put by the FCA on “standstill”, which lasts until 31 March 2022; i.e. during this standstill period, firms can effectively ignore the relevant changes and continue to comply with the current requirements.
We summarise here how the standstill applies to some of the key legislation. Note that this does not cover the changes themselves that have been made due to Brexit.
- Cross Border Payments in Euro Regulation (CBPR)
All changes to the Payments in Euro (Credit Transfers and Direct Debits) Regulations 2012 (which implements certain CBPR provisions) are subject to the standstill.
Note that changes to the CBPR itself are not on standstill, which effectively means firms no longer need to comply with it other than certain FX disclosure requirements from 1 January 2021.
- Payment Services Regulations 2017 and Electronic Money Regulations 2011
All amendments (except for a few technical changes) to PSR2017 and EMR2011 are subject to the standstill.
However, note that the “strong customer authentication” requirements are not subject to this standstill and will apply from 14 September 2021.
- Payment Accounts Regulations 2015
All amendments to PAR2015 (which implements the EU Payment Accounts Directive) are subject to the standstill.
Money Laundering, Terrorist Financing and Transfer of Funds (Information on the Payer) Regulations 201
All amendments to MLR2017 are on standstill, but only regarding provisions which the FCA is responsible for.
- Prudential requirements
Essentially, all amendments to the regulatory capital requirements are on standstill for FCA solo-regulated firms (and, as per PRA directions, dual-regulated firms too).
There are various and complex carve-outs under the standstill framework. Firms need to consider carefully and determine which new requirements they need to comply with immediately post-Brexit and which they can plan for later.