On 12 December 2024, HM Treasury (HMT) and the Economic Secretary to the Treasury, Tulip Siddiq MP, announced the launch of an independent review of the Payment and Electronic Money Institution Insolvency Regulations 2021.

Background

The Payment and Electronic Money Institution Insolvency Regulations 2021 introduced a new Payment and Electronic Money Special Administration Regime (PESAR), in response to lengthy administration cases of payment and electronic money firms which led to delays for customers in accessing their funds. The PESAR introduced new statutory objectives for administrators of those firms, including the objective to return customer funds as soon as practicable.

HMT is required to appoint an independent reviewer to assess how the regime is working in practice, including how far the regulations are achieving their intended objectives (as set out in the Payment and Electronic Money Institution Insolvency Regulations 2021 and the Banking Act 2009) and whether the regulations should continue to have effect.

The review

Points to be assessed by the review include:

• The impact of the PESAR on individual customers in administration cases where it has been used.
• The extent to which the PESAR would effectively manage the failure of a larger payment firm, given it has so far been used only on smaller firms.
• The efficacy of cooperation between Government authorities, in particular between HMT, the Bank of England, the Financial Conduct Authority and the Insolvency Service, and how collaboration could be improved.
• The effectiveness of cooperation between the UK authorities and authorities from other jurisdictions.

The reviewer will produce a report which will be laid before Parliament. Further details on the scope of the review and how to submit evidence are set out in the terms of reference.