Payments regulatory news, March 2020

Hogan Lovells

Hogan Lovells

Recent regulatory developments of interest to financial institutions.


  • Download the full regulatory news bulletin
  • PSR issues new directions and response to consultation feedback
  • Specific Direction 8 on protected ATMs: PSR annual review
  • 2019 SEPA scheme rulebooks: EPC update
  • SEPA Proxy Lookup Scheme rulebook version 2
  • Interchange Fee Regulation: European Commission study


PSR issues new directions and response to consultation feedback

The Payment Systems Regulator (PSR) has issued new versions of its directions following its consultation in CP19/3. It has also published a document, RP20/1, containing its responses to the feedback it received to CP19/3 in which it consulted on the new versions, and explaining the final changes. The PSR has also published a factsheet.

The new versions of its directions are:

The General Directions take effect from 5 April 2020.

The new Specific Direction (SD1) will take effect from 5 May 2020. The two-month transition period will allow time for sponsor banks to change their processes and procedures to ensure they are compliant with the new timeline obligation.

The previous versions of the directions (referred to as the "day one" directions as the PSR issued them when it became operational in 2015) will cease to apply on these dates.


Specific Direction 8 on protected ATMs: PSR annual review

The PSR has published a report following its first annual review of specific direction 8 (SD8). SD8 requires LINK to do all it can to fulfil its commitment to maintain the broad geographic spread of free-to-use ATMs.

Overall, the PSR has concluded that SD8 remains necessary at this stage to ensure that LINK does all it can to deliver on its commitment to maintain widespread cash access and that information about LINK's progress is transparent. LINK's commitment and SD8 support cash access in the short-term. The PSR is also working with other authorities as part of the Joint Authorities Cash Strategy Group and industry to develop longer-term solutions to society's ongoing need for access to cash in a rapidly changing environment.

Alongside its report, the PSR has published the submissions it received in response to the review. In addition, it has published a summary of the roundtable discussion it held in October 2019 on its research into cash access, use and acceptance.

The PSR will continue to monitor LINK's commitment and how it is being met and will engage with LINK directly if it has concerns. SD8 is due for a second review in October 2020 and, at this stage, the PSR will reassess the direction and related policies. It will then call for views. If any conclusions and broader market developments resulted in changes to SD8, it would consult on these first.


2019 SEPA scheme rulebooks: EPC update

The European Payments Council (EPC) has published updated versions (versions 1.1) of the following 2019 Single European Payments Area (SEPA) scheme rulebooks:

The updated rulebooks include an updated version of the Scheme Management Internal Rules (now named "Single Euro Payments Area Payment Scheme Management Rules"). These rules now reflect the creation of a Dispute Resolution Committee (DRC) which replaces the Compliance and Adherence Committee (CAC) and the Appeals Committee. The DRC will be responsible for complaints management and appeals for all EPC-managed payment and payment-related schemes. The adherence process of the various schemes will be managed by the EPC secretariat, whereby complaints can be raised with the DRC.

The EPC says there are no changes to the business and operational rules in the updated version 1.1 of the rulebooks.

The updated versions are in force from 1 April 2020 to 21 November 2021.


SEPA Proxy Lookup Scheme rulebook version 2

The EPC has published version 2 of its Single European Payments Area (SEPA) Proxy Lookup (SPL) Scheme rulebook which will come into effect on 1 June 2020.

The main changes include:

  • the email address and reachability check as optional features in the SPL scheme;
  • the specification of a maximum liability amount equal to the fee paid to the Responding Registry Provider (RRP) for the provision of the data; and
  • the possibility for an SPL scheme participant in its role of RRP to charge a fee in exchange of services received by the Initiating Registry Provider (IRP).

In February 2019, the EPC invited stakeholders to submit change requests concerning the rulebook for the 2019 rulebook change management cycle. In May 2019, the EPC published a consultation paper on changes to the rulebook. It has now also published a change proposal submission document setting out the feedback received to the consultation and the policy decisions taken by the EPC.

In addition, the EPC has published a zip file relating to the SPL Scheme Adherence Pack. It contains template versions of the adherence agreement and the schedule information document that must be completed and signed for adherence to SPL Scheme.

The updated version of the rulebook will come into effect on 1 June 2020.


Interchange Fee Regulation: European Commission study

The European Commission has published a study on the application of Regulation 2015/751 on interchange fees for card-based payment transactions (the Interchange Fee Regulation (IFR)).

The IFR entered into force on 8 June 2015 and was intended to help create a single market for card payments across the EU and to create a level playing field that allows more competition and spurs innovation in payments.

Article 17 of the IFR requires the Commission to review the application of the IFR and its market effects, submitting a report by mid-2020 to the European Parliament and to the Council.

This report covers the study and its findings. The European Commission sets out a number of recommendations in the report.

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DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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