Legalize / United Kingdom / Statutory-Instrument

The Payment Services Regulations 2017

Type Statutory-Instrument

Publication 2017-07-18

State In force

Department King's Printer of Acts of Parliament

Source legislation.gov.uk

Reform history JSON API PDF

Made: 18th July 2017

Laid before Parliament: 19th July 2017

Coming into force in accordance with regulation 1

The Treasury are a government department designated for the purposes of section 2(2) of the European Communities Act 1972 in relation to financial services.

The Treasury make these Regulations in exercise of the powers conferred on them by section 2(2) of the European Communities Act 1972, sections 22(1) and (5) and 428(3) of, and paragraph 20(4)(d) of Schedule 1ZA and paragraph 15(1) of Schedule 2 to, the Financial Services and Markets Act 2000 , section 3 of the Child Trust Funds Act 2004 , section 694 of the Income Tax (Trading and Other Income) Act 2005 , sections 85(2)(b) and 109(4)(b) of the Financial Services Act 2012 and paragraph 10(4)(b) and (5)(b) of Schedule 4 to the Financial Services (Banking Reform) Act 2013 .

PART 1 — Introductory provisions

Citation, commencement and extent

1

(1) These Regulations may be cited as the Payment Services Regulations 2017.

(2) The following provisions come into force on 13th August 2017—

(a) this regulation and regulations 2 (interpretation), 106 (functions of the FCA), 112(6) (policy on imposition of penalties), 118 (costs of supervision), 120 (guidance), 121 (FCA's exemption from liability in damages) and 147 (duty to co-operate and exchange of information);

(b) regulation 122 and the following provisions of Schedule 6 (application and modification of legislation)—

(i) paragraph 1 (disciplinary powers) in so far as that paragraph applies sections 69 and 70 of the 2000 Act;

(ii) paragraph 3 (FCA rules) for the purpose of enabling the FCA to make rules;

(iii) paragraph 5 (control over payment institutions) in so far as that paragraph applies the provisions of sections 179 and 191E of the 2000 Act which confer functions on the FCA;

(iv) paragraph 12 (application of the Financial Services and Markets Act 2000 (Service of Notices) Regulations 2001 );

(i) paragraph 2(6) (amendment of section 379A of the 2000 Act);

(ii) paragraph 3(b) (amendment of Schedule 15 to the Enterprise Act 2002 );

(iii) paragraph 5 (amendment of the Electronic Money Regulations 2011 ) for the purpose of enabling the FCA to impose requirements, give directions and make rules;

(d) for the purpose of enabling the FCA to impose requirements and give directions—

(i) regulation 5(3) and (5) (applications for authorisation as a payment institution);

(ii) regulation 6(7)(e) and (f) (professional indemnity insurance for authorised payment institutions);

(iii) regulation 11(1) and (3) (cancellation of registration);

(iv) regulation 13(1), (2), (3) and (5) (application for registration);

(v) regulation 15 (small payment institutions: supplementary provision) in so far as it applies regulation 11(1) and (3);

(vi) regulation 17(1)(b) and (3) (application for registration as an account information service provider);

(vii) regulation 18(4)(b) (professional indemnity insurance for registered account information service providers);

(viii) regulation 19 (registered account information service providers: supplementary provision) in so far as it applies regulation 11(1) and (3);

(ix) regulation 20(3) (duty to notify changes);

(x) regulation 27(1) (notice of intention);

(xi) regulation 30(4), (5) and (7) (supervision of firms exercising passport rights);

(xii) regulation 34(3) and (4) (application for registration of agent);

(xiii) regulation 37(2) (duty to notify change in circumstances);

(xiv) regulation 38(4) (notification of use of limited network exclusion);

(xv) regulation 39(3) to (5) (notification of use of electronic communications exclusion);

(xvi) regulation 71(8)(c) (denial of access to an account information service provider);

(xvii) regulation 98(3) (management of operational and security risks);

(xviii) regulation 99(2) (incident reporting);

(xix) regulation 105(4)(b) (refusal of access to bank account);

(xx) regulation 109(1) to (3) and (5) (reporting requirements);

(xxi) regulation 119 to the extent that it gives effect to paragraph 5(1), (3) and (4) of Schedule 5 (credit agreements).

(3) The following provisions come into force on 13th October 2017—

(a) Part 2, for the purposes of enabling—

(i) the making and determination of applications for authorisation or registration (including the imposition of requirements in relation to authorisations and registrations); and

(ii) the giving of notices under regulation 3(2) (exemption for municipal banks);

(b) for the purposes of enabling the giving of notifications and the making of applications to the FCA and enabling the FCA to take action in response to such notifications and applications, regulations 25 (outsourcing), 34 (use of agents) and 39 (notification of use of electronic communications exclusion);

(c) In Schedule 6 (application and modification of legislation), paragraphs 2 (the Upper Tribunal), 5 (control over payment institutions) in so far as not already in force, 8 (restriction on disclosure of information), 10 (warning notices and decision notices) and 13 (application of the Financial Services and Markets Act 2000 (Disclosure of Confidential Information) Regulations 2001);

(d) regulations 142 to 146 (misleading the FCA);

(e) regulation 150 (transitional and saving provisions), for the purposes of enabling the provision of information or giving of notification under regulation 150(3), and enabling the FCA to take action in response to such information or notification;

(f) regulation 156 in so far as it gives effect to—

(i) paragraph 5 of Schedule 8 (amendment of the Electronic Money Regulations 2011), for the purpose of enabling the giving of notifications, the making or determining of applications and the taking of action in response to such applications and notifications under the Electronic Money Regulations 2011;

(ii) paragraph 6 of Schedule 8 (amendment of the Rehabilitation of Offenders Act 1974 (Exceptions) Order 1975 ), for the purpose of the FCA's determination of applications for authorisation or registration under Part 2 of these Regulations (including the imposition of requirements in relation to authorisations and registrations).

(4) Regulations 27 (notice of intention) and 28 (decision following notice of intention) come into force on 13th December 2017 for the purposes of enabling the giving of notifications and enabling the FCA to take action in response to such notifications.

(5) Regulations 68(3)(c), 69(2)(a) and (3)(d), 70(2)(a) and (3)(c), 77(4)(c) and (6) and 100 (secure communication and authentication) come into force on 14th September 2019.

(6) Except as provided in paragraphs (2) to (5), these Regulations come into force on 13th January 2018.

(7) Paragraph 6 of Schedule 8 (amendment of the Rehabilitation of Offenders Act 1974 (Exceptions) Order 1975) extends to England and Wales only.

Interpretation

2

(1) In these Regulations—

“the 2000 Act” means the Financial Services and Markets Act 2000;

“account information service” means an online service to provide consolidated information on one or more payment accounts held by the payment service user with another payment service provider or with more than one payment service provider, and includes such a service whether information is provided—in its original form or after processing;only to the payment service user or to the payment service user and to another person in accordance with the payment service user's instructions;

“account information service provider” means a payment service provider which provides account information services;

“account servicing payment service provider” means a payment service provider providing and maintaining a payment account for a payer;

“acquiring of payment transactions” means a payment service provided by a payment service provider contracting with a payee to accept and process payment transactions which result in a transfer of funds to the payee;

“agent” means a person who acts on behalf of an authorised payment institution, a small payment institution or a registered account information service provider in the provision of payment services;

“authentication” means a procedure which allows a payment service provider to verify the identity of a payment service user or the validity of the use of a specific payment instrument, including the use of the user's personalised security credentials;

“authorised payment institution” means—a person authorised as a payment institution pursuant to regulation 6 (conditions for authorisation as a payment institution) and included by the FCA in the register as an authorised payment institution pursuant to regulation 4(1)(a) (the register of certain payment service providers); ora person included by the FCA in the register pursuant to regulation 150 or 152, and regulation 153(1) (transitional provisions);

“the FCA” means the Financial Conduct Authority;

“branch” means a place of business, other than the head office, of—an authorised payment institution;a small payment institution; ora registered account information service provider;......which forms a legally dependent part of such a payment service provider and which carries out directly all or some of the services inherent in the business of such a payment service provider; ...

“business day” means any day on which the relevant payment service provider is open for business as required for the execution of a payment transaction;

“the capital requirements regulation” means Regulation (EU) No. 575/2013 of the European Parliament and of the Council of 26 June 2013 on prudential requirements for credit institutions and investment firms;

“charity”, in Parts 6 (information requirements for payment services) and 7 (rights and obligations in relation to the provision of payment services), means a body whose annual income is less than £1 million and is—in England and Wales, a charity as defined by section 1(1) of the Charities Act 2011 (meaning of “charity”) ;in Scotland, a charity as defined by section 106 of the Charities and Trustee Investment (Scotland) Act 2005 (general interpretation) ;in Northern Ireland, a charity as defined by section 1(1) of the Charities Act (Northern Ireland) 2008 (meaning of “charity”) ;

“co-badged”, in relation to a payment instrument, refers to an instrument on which is included two or more payment brands, or two or more payment applications of the same payment brand;

“the Commissioners” means the Commissioners for Her Majesty's Revenue and Customs;

“consumer” means an individual who, in contracts for payment services to which these Regulations apply, is acting for purposes other than a trade, business or profession;

“credit institution” has the meaning given in Article 4(1)(1) of the capital requirements regulation;

“credit transfer” means a payment service for crediting a payee's payment account with a payment transaction or a series of payment transactions from a payer's payment account by the payment service provider which holds the payer's payment account, based on an instruction given by the payer;

“designated system” has the meaning given in regulation 2(1) of the Financial Markets and Insolvency (Settlement Finality) Regulations 1999 (interpretation) ;

“digital content” means goods or services which are produced and supplied in digital form, the use or consumption of which is restricted to a technical device and which do not include in any way the use or consumption of physical goods or services;

“direct debit” means a payment service for debiting the payer's payment account where a payment transaction is initiated by the payee on the basis of consent given by the payer to the payee, to the payee's payment service provider or to the payer's own payment service provider;

“durable medium” means any instrument which enables the payment service user to store information addressed personally to them in a way accessible for future reference for a period of time adequate for the purposes of the information and which allows the unchanged reproduction of the information stored;

“electronic communications network” means transmission systems and, where applicable, switching or routing equipment and other resources which permit the conveyance of signals by wire, by radio, by optical or by other electromagnetic means, including satellite networks, fixed (circuit- and packet-switched, including Internet) and mobile terrestrial networks, electricity cable systems, to the extent that they are used for the purpose of transmitting signals, networks used for radio and television broadcasting, and cable television networks, irrespective of the type of information conveyed;;

“electronic communications service” means a service normally provided for remuneration which consists wholly or mainly in the conveyance of signals on electronic communications networks, including telecommunications services and transmission services in networks used for broadcasting, but exclude services providing, or exercising editorial control over, content transmitted using electronic communications networks and services; it does not include information society services, as defined in Article 1 of Directive (EU) 2015/1535 of the European Parliament and of the Council of 9 September 2015 laying down a procedure for the provision of information in the field of technical regulations and of rules on Information Society services, which do not consist wholly or mainly in the conveyance of signals on electronic communications networks;

“electronic money” has the meaning given in regulation 2(1) of the Electronic Money Regulations 2011;

“electronic money institution” has the meaning given in regulation 2(1) of the Electronic Money Regulations 2011;

“excluded provider” means a provider of services falling within paragraphs 2(k)(i) to (iii), (l) or (o) of Schedule 1 (limited network, electronic communications and cash withdrawal exclusions);

“framework contract” means a contract for payment services which governs the future execution of individual and successive payment transactions and which may contain the obligation and conditions for setting up a payment account;

“funds” means banknotes and coins, scriptural money and electronic money;

“group” means a group of—undertakings linked to each other by a relationship referred to in Article 22(1), (2) or (7) of Directive 2013/34/EU of the European Parliament and of the Council of 26th June 2013 on the annual financial statements, consolidated financial statements and related reports of certain types of undertakings, amending Directive 2006/43/EC of the European Parliament and of the Council and repealing Council Directives 78/660/EEC and 83/349/EEC ; orundertakings as defined in Articles 4 to 7 of Commission Delegated Regulation (EU) No. 241/2014 of 7th January 2014 supplementing Regulation (EU) 575/2013 of the European Parliament and of the Council with regard to regulatory technical standards for Own Funds requirements for institutions , which are linked to each other by a relationship referred to in Article ... 113(6) ... of the capital requirements regulation;

“interchange fee regulation” means Regulation (EU) 2015/751 of the European Parliament and of the Council of 29th April 2015 on interchange fees for card-based payment transactions ;

“issuing of payment instruments” means a payment service by a payment service provider contracting with a payer to provide a payment instrument to initiate payment orders and to process the payer's payment transactions;

“means of distance communication” means a method which, without the simultaneous physical presence of the payment service provider and the payment service user, may be used for the conclusion of a contract for payment services between those parties;

“micro-enterprise” means an enterprise which, at the time at which the contract for payment services is entered into, is an enterprise as defined in Article 1 and Article 2(1) and (3) of the Annex to Recommendation 2003/361/EC of 6th May 2003 concerning the definition of micro, small and medium-sized enterprises ;

“money remittance” means a service for the transmission of money (or any representation of monetary value), without any payment accounts being created in the name of the payer or the payee, where—funds are received from a payer for the sole purpose of transferring a corresponding amount to a payee or to another payment service provider acting on behalf of the payee; orfunds are received on behalf of, and made available to, the payee;

“notice” means a notice in writing;

“own funds” means own funds as defined in Article 4(1)(118) of the capital requirements regulation, and “Common Equity Tier 1 capital”, “Tier 1 capital” and “Tier 2 capital” have the same meanings as in that regulation;

“parent undertaking” has the same meaning as in the Companies Acts, as defined by section 1162 of, and Schedule 7 to, the Companies Act 2006 (parent and subsidiary undertakings) ;

“participant” has the meaning given in regulation 2(1) of the Financial Markets and Insolvency (Settlement Finality) Regulations 1999 (interpretation) ;

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