HM Treasury is consulting on how it plans to integrate the PSR’s functions primarily within the FCA, following its announcement earlier this year. It wants the FCA to take on the PSR’s responsibilities so that there will be a more streamlined regime for payment systems in future. It will do this by integrating the PSR’s functions within the FCA’s FSMA framework so far as possible, and amending FSMA to allow it where necessary.
There will be no change in the scope of payment systems regulation, and no new regulated activities so the FCA’s regime will apply to payment systems and their participants, and alongside this the FCA will continue in its role as conduct and prudential regulator including its existing functions as e-money and payment services supervisor. Again, there is no plan to alter the obligations and rules that apply to any market participant as a result of the integration as the Government does not think FSMA style supervision is appropriate for payment systems and participants who are not currently within FCA’s scope.
The Government also thinks the current approach to designation in the FSBRA 2013 works well and intends both to keep it and not to make any change to current designations.
Broadly, the PSR’s regulatory objectives will be transferred to the FCA to apply in relation to payment systems regulation but also apply the FCA’s current strategic and competitiveness and growth secondary objective and to impose on the FCA similar “have regard” obligations as the PSR has. It is also considering a wider consultation on changing the regulatory principles under which the PRA and FCA currently operate, including to change from from “day to day” principles to strategic ones.
The PSR’s powers will also transfer to the FCA, and the Government will take appropriate action to give the FCA those powers where needed.
Consultation closes on 20 October.