Recent regulatory developments focussed on the payments sector.
The draft Payment and Electronic Money Institution Insolvency Regulations have been laid before Parliament. The draft Regulations, if made, will create a new special administration regime for payment and electronic money institutions.
A draft explanatory memorandum states that this new regime will give insolvency practitioners administering the insolvencies of payment or electronic money institutions an expanded toolkit. This will allow the insolvency practitioner to keep an insolvent institution operational with the aim of ensuring continuity for consumers and prioritising the return of their funds.
The draft Regulations will also extend the full suite of Financial Services and Markets Act 2000 Part 24 provisions to all payment and electronic money institutions entering the standard insolvency process. This will provide the Financial Conduct Authority (FCA) with specific powers to participate and protect consumers in the event of an insolvency of a payment or electronic money institution as it does for other FCA supervised firms.
The draft Regulations follow HM Treasury's consultation on the insolvency of payment institutions and electronic money institutions in December 2020. The Treasury has published a response to its consultation.
Interchange Fee Regulation: PSR consults on updating guidance
The Payment Systems Regulator (PSR) has published a consultation paper, CP21/5, on necessary amendments to its Guidance on the Interchange Fee Regulation (EU IFR) following the UK's withdrawal from the EU and changes to the regulatory framework.
A marked-up draft of the amended guidance is set out in Annex 2 to CP21/5, which has been published separately.
Comments can be made on the proposals until 21 May 2021. The PSR will assess the responses from May to July 2021. It plans to publish the final version of the updated guidance later in 2021.