On 7 August 2023, HM Treasury published its response to the 2022 call for evidence and consultation on reforms to the Bank of England’s (BoE) and Payment Systems Regulator’s (PSR) respective regulatory frameworks over the payments sector.

In the response document, HM Treasury commits to progressing reforms to both the BoE’s and the PSR’s respective statutory perimeters over payments, following proposals laid out in its initial 2022 consultation.

The response also:

  • Summarises feedback received to the call for evidence concerning the government’s proposals and outlines its overall approach to enabling these reforms through primary legislation “when future parliamentary time allows”.
  • Provides updates in relation to the government’s commitment to enable rulemaking and direction-making powers for the FCA and PSR over their aspects of retained EU payments law, as part of the government’s approach towards enabling a Smarter Regulatory Framework for financial services.
  • Includes an update on the remit of the Senior Managers and Certification Regime in relation to payments, noting the government’s ongoing wider review of the regime.

HM Treasury confirms that:

  • It is committed to taking forward the reforms to the BoE’s systemic perimeter at a future legislative opportunity. HM Treasury plans to issue a further public statement setting out its legislative approach as it determines a suitable vehicle for enacting these reforms. The BoE will be expected to set out its approach for how it will supervise over its expanded remit after legislation taking forward these reforms is published.
  • A statutory instrument has been laid to provide powers to the FCA and PSR over their respective retained EU law for payment services, following the Chancellor’s July 2023 Mansion House speech.
  • HM Treasury will provide further detail on its approach to replacing the Payment Services Regulations 2017 and the Electronic Money Regulations 2011, in response to its January 2023 call for evidence, later in 2023.
  • Next steps regarding the future, consulted-on extensions to the BoE or FCA’s remit over payments will be set out after the government’s broader review of the SM&CR has been concluded.
  • Secondary legislation will be brought forward to reform the PSR’s payment system access framework, as consulted on in 2022.
  • Taking forward other consulted-on reforms to the PSR’s framework will also require an Act of Parliament, and the government plans to return to these proposals as part of a future policy statement at a future legislative opportunity.