Recent regulatory developments focussed on the payments sector. Reports on a BoE update on its policy for omnibus accounts in its RTGS service, and an LSB update on the CRM Code for APP scams. See also our Financial institutions general regulatory news of broad relevance in the Related Materials links.
The Bank of England (BoE) has published a press release containing information about its policy for omnibus accounts in its real-time gross settlement (RTGS) service, including a link to its policy regarding omnibus accounts. Operators of new and existing payment systems can now apply to the BoE to open an omnibus account. Applicants will be assessed against eligibility requirements, which are designed to mitigate the risks to UK financial stability.
The omnibus account model has been added as a new model to enable payment systems to settle in central bank money. Under this new model, an operator of a payment system can hold funds in the omnibus account to fund their participants' balances with central bank money. This will allow them to offer innovative payment services, while having the security of central bank money settlement. They can support a wide range of high-value payments, which could range from a commercial bank buying government bonds to a small business paying their suppliers.
The Lending Standards Board (LSB) has published an updated version of the contingent reimbursement model code (CRM Code) for authorised push payment (APP) scams (Code). The update follows the LSB's review of Code, published in January.
The LSB states that the updates include the introduction of governance and oversight requirements into the Code. The new provisions will support embedding and ongoing oversight of the Code's requirements as well as ensuring that Code-related policies and processes are formalised and customer facing staff have greater awareness of the Code. These provisions will be effective from 14 June 2021.