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Surveys and Reports
Regulatory Developments
United Kingdom: Financial Services Act 2021 becomes law
On 29 April 2021, the Financial Services Bill 2019-21 received Royal Assent. In a press release, HM Treasury described the Financial Services Act 2021 (the Act) as a ‘major milestone in shaping a regulatory framework for UK financial services outside of the EU.’ The Act makes significant amendments to key legislation, including the Financial Services and Markets Act 2000 (FSMA) and onshored EU financial services regulation.
Sections of particular relevance include the following:
Section 29 requires the FCA to consult on whether it should make rules providing that authorised persons owe a duty of care to consumers. The consultation was launched on 14 May 2021 (see the separate item below). The FCA must publish the results of its analysis before 1 January 2022 and make final rules by 1 August 2022;
Recent regulatory developments focussed on the payments sector.
Contents
Interchange Fee Regulation: PSR consults on updating guidance
Draft Payment and Electronic Money Institution Insolvency Regulations
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.
Surveys and Reports
Regulatory Developments
United Kingdom: HM Treasury consultation on new special administration regime for payment institutions and electronic money institutions
On 3 December 2020 HM Treasury (HMT) issued a consultation on proposed insolvency changes for payment institutions (PIs) and electronic money institutions (EMIs), including a bespoke special administration regime (SAR). HMT notes the shortcomings of the current insolvency regime and is making these proposals ahead of the conclusion of the Payments Landscape Review to protect consumers in the event of the insolvency of PIs and EMIs.
The proposed SAR is intended to have the following key features:
An explicit objective on the special administrator to return customer funds as soon as reasonably practicable.