UK's HM Treasury consults on integrating the Payment Systems Regulator into the Financial Conduct Authority

UK’s HM Treasury has published a consultation setting out proposals to abolish the Payment Systems Regulator (PSR) and transfer all of its payment systems regulatory functions into the Financial Conduct Authority (FCA), with the FCA taking on responsibility for promoting competition and innovation in payment systems and supporting the interests of consumers and businesses. The proposed consolidation would move the PSR’s statutory objectives, powers and accountability arrangements into the FCA’s framework under the Financial Services and Markets Act 2000 to the extent practicable, with any elements that cannot be accommodated expected to sit in a new part of that Act. HM Treasury proposes to retain the current designation-based perimeter for payment systems regulation, meaning there would be no new regulated activity and no new categories of persons brought into scope, with regulation continuing to apply to designated payment systems and their participants (operators, infrastructure providers and payment service providers). The FCA would be equipped with powers broadly equivalent to the PSR’s, and the consultation also explores targeted simplification, including a move to a single access regime for payment systems by removing overlap between the PSR’s access toolkit and the Payment Services Regulations 2017 access provisions. The Bank of England’s and Prudential Regulation Authority’s roles in payments would remain unchanged, alongside an intended power to require the FCA not to exercise payment systems functions in certain circumstances. Responses are requested by 20 October, with legislation to implement the final policy to follow when Parliamentary time allows. The Payments Vision Delivery Committee is expected to publish a Payments Forward Plan by the end of the year.