Hogan Lovells

Recent regulatory developments focussed on the payments sector.


  • ISO 20022 migration: BoE revised approach
  • PSD2: Delegated Regulation on RTS on central contact points
  • PSD2: EBA consults on revision of guidelines on major incident reporting
  • Enhancing cross-border payments: FSB roadmap

ISO 20022 migration: BoE revised approach

The Bank of England (BoE) has updated its webpage on ISO 20022 with the following information.

The real-time gross settlement (RTGS) Renewal Programme has consulted with CHAPS direct participants, other central banks and members of the payments industry on its plans for ISO 20022 migration. In light of this and an impact assessment, the Programme confirms a revised approach to ISO 20022 migration:

  • Phase 2 (TS2): The BoE will migrate the CHAPS payments messages to ISO 20022 in 2022, however, the implementation date will move from April to June. From June 2022, the BoE will require all CHAPS direct participants to send and receive like-for-like ISO 20022 payment messages using the like-for-like schemas. ISO messaging will be on a like-for-like basis only at this point (enhanced data will not be permitted). Migration to ISO 20022 messaging in 2022 remains critical for ensuring that the BoE is able to introduce the new RTGS2 core ledger and settlement engine, and decommission the existing RTGS system in 2023.
  • Phase 2.1 (TS2.1): From February 2023, on the basis that the SWIFT correspondent banking network will migrate to ISO 20022 (with enhanced data enabled) in November 2022, the BoE will require all CHAPS direct participants to receive enhanced ISO 20022 payment messages and, at a minimum, continue to send like-for-like messages, using the enhanced schemas. Direct participants will be able to send enhanced messages, but will not be mandated to do so. The like-for-like schemas and rules will be forward compatible with the enhanced schemas and the like-for-like schemas will be decommissioned at this point.
  • Phase 3 (TS3): The BoE will introduce the new RTGS2 core ledger and settlement engine in September 2023, around six months later than previously announced. At this point, CHAPS direct participants must continue to be able to receive enhanced messages, as under Phase 2.1. There will be a further announcement confirming the approach to mandating the population of enhanced data. The BoE does not currently expect to mandate enhanced data before 2024.

The BoE will provide further guidance for CHAPS direct participants on these changes, together with technical information, during the week commencing 26 October 2020.

PSD2: Delegated Regulation on RTS on central contact points

Commission Delegated Regulation (EU) 2020/1423 supplementing the revised Payment Services Directive (PSD2) with regard to regulatory technical standards (RTS) on the criteria for appointing central contact points within the field of payment services and on the functions of those central contact points, has been published in the Official Journal of the EU.

The RTS set out the criteria for the appointment of central contact points by payment institutions. Their aim is to create legal certainty about the criteria that member states will apply to determine whether it is appropriate to appoint a central contact point and to set out the functions a central contact point must have to fulfil its duties.

The Delegated Regulation will enter into force and apply on 29 October 2020.

PSD2: EBA consults on revision of guidelines on major incident reporting

The European Banking Authority (EBA) has published a consultation paper setting out proposals to revise its guidelines on major incident reporting under PSD2. The guidelines apply to the classification and reporting of major operational or security incidents in accordance with Article 96 of PSD2 and are addressed to payment service providers (PSPs) and the competent authorities (CAs).

The EBA acknowledges the European Commission's recent legislative proposal for an EU regulatory framework on digital operational resilience (DORA), which contains a proposal for incident reporting that is inspired by PSD2 but goes beyond payments-related incidents. It notes that, while it will be years before that framework becomes legally applicable, it expects the revised guidelines proposed in the current consultation to become applicable in Q4 2021 and remain in force at least until the DORA requirements take effect.

The consultation closes on 14 December 2020 and the EBA will publish a final report in due course.

Enhancing cross-border payments: FSB roadmap

The Financial Stability Board (FSB) has published a Stage 3 report on enhancing cross-border payments, in which it presents a roadmap to address the key challenges faced by cross-border payments and the frictions in existing processes that contribute to these challenges.

The roadmap was developed by the FSB, in coordination with the Committee on Payments and Market Infrastructures (CPMI) and other relevant international organisations and standard-setting bodies. It builds on the FSB's Stage 1 report, setting out the challenges and the frictions in cross-border payments that contribute to them, and the CPMI's Stage 2 report, describing the necessary elements of a response.

The roadmap provides a high-level plan setting goals and milestones that can be adapted as work progresses across five focus areas:

  • committing to a joint public and private sector vision to enhance cross-border payments;
  • coordinating on regulatory, supervisory and oversight frameworks;
  • improving existing payment infrastructures and arrangements to support the requirements of the cross-border payments market;
  • increasing data quality and straight-through processing by enhancing data and market practices; and
  • exploring the potential role of new payment infrastructures and arrangements.

The FSB will coordinate the work and report annually on progress to the G20 and the public, which may result in the roadmap being updated and adapted over time to ensure it meets its goals.

The roadmap has been delivered to G20 Finance Ministers and Central Bank Governors for their meeting on 14 October 2020.

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