On 1 August 2018, the FCA published Consultation Paper 18/21: General standards and communication rules for the payment services and e-money sectors (CP18/21). CP18/21 will be of interest to payment service providers and e-money issuers as well as the trade bodies representing them. It will also be of interest to credit institutions providing payment services and/or issuing e-money.

The FCA’s Principles for Businesses (Principles) set out the standards that FCA regulated firms are expected to comply with and the FCA wants to ensure that entities that provide payment services and issue e-money are subject to them. Currently the Principles apply to the issuance of e-money by credit institutions, but, in most cases, to payment services only when such services are carried on as ancillary to a regulated activity.

In CP18/21 the FCA proposes to:

  • extend the application of the Principles to the provision of payment services and issuance of e‑money (where not already a regulated activity), as well as other connected activities. The Principles are also extended to payment institutions, electronic money institutions and registered account information service providers;
  • extend the application of certain communication rules and guidance in chapter 2 of the Banking Conduct of Business Sourcebook (BCOBS 2) to communication with payment service and e‑money customers; and
  • introduce rules and guidance on the communication and marketing of currency exchange transfer services, applicable to payment services and the issuance of e‑money involving a currency conversion.

The deadline for comments on CP18/21 is 1 November 2018. The FCA expects to publish rules on the topic before 31 January 2019.