The Payment Accounts Regulations 2015 (PARs) have a staggered implementation date, with the majority of the provisions coming into
force in the UK on 18 September 2016. In anticipation of this, the Financial Conduct Authority (FCA) published its Policy Statement summarising the feedback received from its March consultation on the implementation of the PARs and confirming the final Handbook changes and finalised guidance on certain provisions.
The PARs give effect to the European Payment Accounts Directive (2014/92/EU) which aims to improve transparency and comparability, facilitate account
switching and encourage access to basic payment accounts. The PARs largely affect firms offering payment account services (e.g. banks, e-money
institutions and payment institutions) and require some amendments to the FCA Handbook. In addition, the FCA has issued non-Handbook guidance to assist payment service providers with the implementation of the PARs.
Summary of Handbook amendments
- In advance of the consultation, the FCA proposed to make minor changes to ICOBS 6 and BCOBS 5 to reflect the PAR provisions relating to packaged accounts and switching respectively. Respondents either agreed with or did not comment on these proposals so the FCA has confirmed that these amendments will be adopted without modification.
- With regard to regulatory reporting requirements (SUP 16) there were several amendments alongside minor amendments to improve clarity and certainty:
(i) Total number of refusals of switching applications to be reported (rather than the proportion of total applications refused).
(ii) Total number of refusals of applications for basic bank accounts to be reported (rather than the proportion of total applications refused).
(iii) Reporting deadline extended to two months (instead of one month) after the end of the reporting period.
The FCA has also issued guidance to assist payment service providers with two specific provisions of the PARs: the definition of ‘payment account’ and the implementation of the provisions on packaged accounts.
- The definition of ‘payment account’ is of particular importance as it will determine whether a payment service provider falls within scope of Parts 2 and 3 of the PARs. The FCA has acknowledged this and has developed some detailed guidance to help assess whether an account is a payment account under PARs. The full guidance can be found here, but it is worth noting as a preliminary point that the definition of a ‘payment account’ in the PSRs is wider than that in the PARs: a ‘payment account’ under the PARs will always be a payment account under the PSRs, but the reverse is not necessarily true.
- The FCA has clarified the scope of the PARs provisions on packaged accounts (Regulation 13), including what ‘other products and services’ may include. There is additional guidance on the timing and method of providing the information on the costs and fees of purchasing the other products/services separately. Find this guidance here.
The FCA’s Handbook changes and non-Handbook guidance became effective on 18 September 2016, along with the majority of the PARs provisions.