HM Treasury's response to the consultation on the amendments to the Payment Service Regulations 2012

06 July 2012

There were 39 responses to the e-mail consultation that the Treasury sent out on 22 February. This page summarises the responses and sets out how the Government will now take forward the proposed regulatory changes.

Question 1

We have considered the possibility of making Small Payments Institutions safeguard customers’ funds in a separate, segregated bank account. We believe the costs of this may be high, so we do not propose to make it a legal requirement. If you have any views on whether safeguarding customers' funds should be a legal requirement please let us know?

31 respondents agreed with the proposal not to make it a legal requirement for Small Payment Institutions to safeguard customers’ funds in a separate bank account. The remaining 8 respondents felt that it should be a legal requirement. A number of respondents also raised concerns about the difficulty that Small Payment institutions face inaccessing a bank current account.

The Government will therefore not make it a legal requirement that Small Payments Institutions should safeguard customers’ funds in a separate, segregated bank account. However, the Treasury will discuss this issue with the European Commission and other Member States as part of the current review of the Payment Services Directive with a view to raising the level of protection available to customers of Small Payments Institutions across Europe in a proportionate, cost effective way.

Question 2

We plan to enable the FSA to check that the individuals responsible for the management, operation or ownership of a Small Payments Institution have the right level of integrity and competence to provide payment services, in other words that they are fit and proper persons to run such a business. This requirement would apply to your firm. Do you have any views on whether the FSA should have the powers to carry out a fit and proper test on such individuals?

All respondents agreed with the proposal to allow the FSA to have the powers to carry out a fit and proper test on individuals with the responsibility for the management, operation and ownership of a Small Payments Institution.

The Government will therefore implement this measure. The Treasury will consider with the FSA and HMRC how this can be implemented in a way that minimises business burdens, for example by providing for coordination and information sharing between HMRC and FSA when registering Small Payment Institutions.

Question 3

We plan to give HM Revenue & Customs the power to strike a firm off the register of Money Service Businesses under the Money Laundering Regulations, if the business is providing, or is purporting to provide, a payment service, when it is not authorised or registered to do so by the FSA. Do you have any views about this proposal?

All respondents agreed with this proposal to give HM Revenues and Customs the power to strike off the register of Money Servicer Business under the Money Laundering Regulations, if the business is providing, or is purporting to provide, a payment service, when it is not authorised or registered to do so by the FSA.

The Government will therefore implement this measure.

Next steps

Amendments to the Payment Services Regulations 2009 will be laid by 10 July and will enter into force on 1 October 2012.

HM Treasury's response to the consultation on the amendments to the Payment Service Regulations 2012

Question 1

Question 2

Question 3

Next steps

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