There has been published on the legislation.gov.uk website, a draft of the Banking Act 2009 (Service Providers to Payment Systems) Order 2017 (Order) which has been laid before Parliament.
The Order will allow service providers to systemically important payment systems to be supervised by the Bank of England (BoE), if recognised by HM Treasury. The BoE already has powers to supervise systemically important payment systems recognised by HM Treasury in order to manage the systemic risks that they could pose to UK financial stability, but not those firms providing services to them. This amendment is intended to close the gap in the BoE’s oversight of systemically important systems. The Order makes the following amendments:
- Part 2 amends Part 5 of the Banking Act 2009 to enable service providers to systemically important payment systems to be supervised by the BoE. Part 2 also includes the Payment Systems Regulator in procedural provisions alongside other financial regulators, in consequence of the establishment of the Payment Systems Regulator under the Financial Services (Banking Reform) Act 2013;
- Part 3 adds the Payment Systems Regulator to the bodies to which the BoE is permitted to disclose information under the Bank of England Act 1998; and
- Part 4 makes amendments to the Financial Services and Markets 2000 (Excluded Activities and Prohibitions) Order 2014 to retain unchanged the effect of that Order following the amendment to the Banking Act 2009 made by the Digital Economy Act 2017.
The amendments made by the draft Order do not require a formal public consultation, but HM Treasury held an informal consultation with industry, which was broadly supportive.
The service providers that the measure may impact are expecting the legislation. HM Treasury has been in discussion with these service providers and they have not raised any concerns.