Legalize / United Kingdom / Public General Act

Financial Services (Banking Reform) Act 2013

Type Public General Act

Publication 2013-12-18

Last updated 2025-06-19

State In force

Department Statute Law Database

Source legislation.gov.uk

articles Not indexed

Reform history JSON API

(63E) (1) A relevant authorised person (“A”) must take reasonable care to ensure that no employee of A performs a specified function under an arrangement entered into by A in relation to the carrying on by A of a regulated activity, unless the employee has a valid certificate issued by A under section 63F. (2) “Specified function”— (a) in relation to the carrying on of a regulated activity by a PRA-authorised person, means a function of a description specified in rules made by the FCA or the PRA, and (b) in relation to the carrying on of a regulated activity by any other authorised person, means a function of a description specified in rules made by the FCA. (3) The FCA may specify a description of function under subsection (2)(a) or (b) only if, in relation to the carrying on of a regulated activity by a relevant authorised person of a particular description— (a) the function is not a controlled function in relation to the carrying on of that activity by a relevant authorised person of that description, but (b) the FCA is satisfied that the function is nevertheless a significant-harm function. (4) The PRA may specify a description of function under subsection (2)(a) only if, in relation to the carrying on of a regulated activity by a relevant PRA-authorised person of a particular description— (a) the function is not a controlled function in relation to the carrying on of that activity by a relevant PRA-authorised person of that description, but (b) the PRA is satisfied that the function is nevertheless a significant-harm function. (5) A function is a “significant-harm function”, in relation to the carrying on of a regulated activity by an authorised person, if— (a) the function will require the person performing it to be involved in one or more aspects of the authorised person's affairs, so far as relating to the activity, and (b) those aspects involve, or might involve, a risk of significant harm to the authorised person or any of its customers. (6) Each regulator must— (a) keep under review the exercise of its power under subsection (2) to specify any significant-harm function as a specified function, and (b) exercise that power in a way that it considers will minimise the risk of employees of relevant authorised persons performing significant-harm functions which they are not fit and proper persons to perform. (7) Subsection (1) does not apply to an arrangement which allows an employee to perform a function if the question of whether the employee is a fit and proper person to perform the function is reserved under any of the single market directives or the emission allowance auctioning regulation to an authority in a country or territory outside the United Kingdom. (8) In this section— - “controlled function” has the meaning given by section 59(3); - “customer”, in relation to an authorised person, means a person who is using, or who is or may be contemplating using, any of the services provided by the authorised person; - “relevant PRA-authorised person” means a PRA-authorised person that is a relevant authorised person. (9) In this section any reference to an employee of a person (“A”) includes a reference to a person who— (a) personally provides, or is under an obligation personally to provide, services to A under an arrangement made between A and the person providing the services or another person, and (b) is subject to (or to the right of) supervision, direction or control by A as to the manner in which those services are provided. (10) For the meaning of “relevant authorised person”, see section 71A. (63F) (1) A relevant authorised person may issue a certificate to a person under this section only if the authorised person is satisfied that the person is a fit and proper person to perform the function to which the certificate relates. (2) In deciding whether the person is a fit and proper person to perform the function, the relevant authorised person must have regard, in particular, to whether the person— (a) has obtained a qualification, (b) has undergone, or is undergoing, training, (c) possesses a level of competence, or (d) has the personal characteristics, required by general rules made by the appropriate regulator in relation to employees performing functions of that kind. (3) In subsection (2) “the appropriate regulator” means— (a) in relation to employees of PRA-authorised persons, the FCA or the PRA, and (b) in relation to employees of any other authorised person, the FCA. (4) A certificate issued by a relevant authorised person to a person under this section must— (a) state that the authorised person is satisfied that the person is a fit and proper person to perform the function to which the certificate relates, and (b) set out the aspects of the affairs of the authorised person in which the person will be involved in performing the function. (5) A certificate issued under this section is valid for a period of 12 months beginning with the day on which it is issued. (6) If, after having considered whether a person is a fit and proper person to perform a specified function, a relevant authorised person decides not to issue a certificate to the person under this section, the authorised person must give the person a notice in writing stating— (a) what steps (if any) the authorised person proposes to take in relation to the person as a result of the decision, and (b) the reasons for proposing to take those steps. (7) A relevant authorised person must maintain a record of every employee who has a valid certificate issued by it under this section. (8) Expressions used in this section and in section 63E have the same meaning in this section as they have in that section.

Rules of conduct

30

(1) Part 5 of FSMA 2000 (performance of regulated activities) is amended as follows.

(2) Omit sections 64 and 65 (and the italic cross-heading preceding them).

(3) Before section 66 insert—

(64A) (1) If it appears to the FCA to be necessary or expedient for the purpose of advancing one or more of its operational objectives, the FCA may make rules about the conduct of the following persons— (a) persons in relation to whom either regulator has given its approval under section 59; (b) persons who are employees of relevant authorised persons (see section 71A). (2) If it appears to the PRA to be necessary or expedient for the purpose of advancing any of its objectives, the PRA may make rules about the conduct of the following persons— (a) persons in relation to whom it has given its approval under section 59; (b) persons in relation to whom the FCA has given its approval under section 59 in respect of the performance by them of a relevant senior management function in relation to the carrying on by a PRA-authorised person of a regulated activity; (c) persons who are employees of relevant PRA-authorised persons. (3) In subsection (2)— - “relevant PRA-authorised person” means a PRA-authorised person that is a relevant authorised person (see section 71A), and - “relevant senior management function” means a function which the PRA is satisfied is a senior management function as defined in section 59ZA (whether or not the function has been designated as such by the FCA). (4) Rules made under this section must relate to the conduct of persons in relation to the performance by them of qualifying functions. (5) In subsection (4) “qualifying function”, in relation to a person, means a function relating to the carrying on of activities (whether or not regulated activities) by— (a) in the case of an approved person, the person on whose application approval was given, and (b) in any other case, the person's employer. (6) In this section any reference to an employee of a person (“P”) includes a reference to a person who— (a) personally provides, or is under an obligation personally to provide, services to P under an arrangement made between P and the person providing the services or another person, and (b) is subject to (or to the right of) supervision, direction or control by P as to the manner in which those services are provided, and “employer” is to be read accordingly. (64B) (1) This section applies where a regulator makes rules under section 64A (“conduct rules”). (2) Every relevant authorised person must— (a) notify all relevant persons of the conduct rules that apply in relation to them, and (b) take all reasonable steps to secure that those persons understand how those rules apply in relation to them. (3) The steps which a relevant authorised person must take to comply with subsection (2)(b) include, in particular, the provision of suitable training. (4) In this section “relevant person”, in relation to an authorised person, means— (a) any person in relation to whom an approval is given under section 59 on the application of the authorised person, and (b) any employee of the authorised person. (5) If a relevant authorised person knows or suspects that a relevant person has failed to comply with any conduct rules, the authorised person must notify the regulator of that fact. (6) In this section “employee”, in relation to an authorised person, has the same meaning as in section 64A. (7) For the meaning of “relevant authorised person”, see section 71A.

Requirement to notify regulator of disciplinary action

31

After section 64B of FSMA 2000 (inserted by section 30 above) insert—

(64C) (1) If— (a) a relevant authorised person takes disciplinary action in relation to a relevant person, and (b) the reason, or one of the reasons, for taking that action is a reason specified in rules made by the appropriate regulator for the purposes of this section, the relevant authorised person must notify that regulator of that fact. (2) “Disciplinary action”, in relation to a person, means any of the following— (a) the issuing of a formal written warning; (b) the suspension or dismissal of the person; (c) the reduction or recovery of any of the person's remuneration. (3) “The appropriate regulator” means— (a) in relation to relevant authorised persons that are PRA-authorised persons, the FCA or the PRA; (b) in relation to any other relevant authorised persons, the FCA. (4) “Relevant person” has the same meaning as in section 64B. (5) For the meaning of “relevant authorised person”, see section 71A.

Definition of “misconduct”

32

(1) In section 66 of FSMA 2000 (disciplinary powers)—

(a) after subsection (1) insert—

(1A) For provision about when a person is guilty of misconduct for the purposes of action by a regulator— (a) see section 66A, in the case of action by the FCA, and (b) see section 66B, in the case of action by the PRA.

;

(b) omit subsections (2), (2A), (6) and (7).

(2) After that section insert—

(66A) (1) For the purposes of action by the FCA under section 66, a person is guilty of misconduct if any of conditions A to C is met in relation to the person. (2) Condition A is that— (a) the person has at any time failed to comply with rules made by the FCA under section 64A, and (b) at that time the person was— (i) an approved person, or (ii) an employee of a relevant authorised person. (3) Condition B is that— (a) the person has at any time been knowingly concerned in a contravention of a relevant requirement by an authorised person, and (b) at that time the person was— (i) an approved person in relation to the authorised person, or (ii) in the case of a relevant authorised person, an employee of the authorised person. (4) In this section “relevant requirement” means a requirement— (a) imposed by or under this Act, or (b) imposed by any qualifying EU provision specified, or of a description specified, for the purposes of this subsection by the Treasury by order. (5) Condition C is that— (a) the person has at any time been a senior manager in relation to a relevant authorised person, (b) there has at that time been (or continued to be) a contravention of a relevant requirement by the authorised person, and (c) the senior manager was at that time responsible for the management of any of the authorised person's activities in relation to which the contravention occurred. (6) But a person (“P”) is not guilty of misconduct by virtue of subsection (5) if P satisfies the FCA that P had taken such steps as a person in P's position could reasonably be expected to take to avoid the contravention occurring (or continuing). (7) For the purposes of subsection (5)— - “senior manager”, in relation to a relevant authorised person, means a person who has approval under section 59 to perform a designated senior management function in relation to the carrying on by the authorised person of a regulated activity; - “designated senior management function” means a function designated as a senior management function under section 59(6A) or (6B). (8) In this section— - “approved person”— 1. means a person in relation to whom an approval is given under section 59, and 2. in relation to an authorised person, means a person in relation to whom such approval is given on the application of the authorised person; - “employee”, in relation to a person, has the same meaning as in section 64A. (9) For the meaning of “relevant authorised person”, see section 71A. (66B) (1) For the purposes of action by the PRA under section 66, a person is guilty of misconduct if any of conditions A to C is met in relation to the person. (2) Condition A is that— (a) the person has at any time failed to comply with rules made by the PRA under section 64A, and (b) at that time the person was— (i) an approved person, or (ii) an employee of a relevant PRA-authorised person. (3) Condition B is that— (a) the person has at any time been knowingly concerned in a contravention of a relevant requirement by a PRA-authorised person, and (b) at that time the person was— (i) an approved person in respect of the performance of a relevant senior management function in relation to the carrying on by the PRA-authorised person of a regulated activity, or (ii) in the case of a relevant PRA-authorised person, an employee of the authorised person. (4) In this section “relevant requirement” means a requirement— (a) imposed by or under this Act, or (b) imposed by any qualifying EU provision specified, or of a description specified, for the purposes of this subsection by the Treasury by order. (5) Condition C is that— (a) the person has at any time been a senior manager in relation to a relevant PRA-authorised person, (b) there has at that time been (or continued to be) a contravention of a relevant requirement by the authorised person, and (c) the senior manager was at that time responsible for the management of any of the authorised person's activities in relation to which the contravention occurred. (6) But a person (“P”) is not guilty of misconduct by virtue of subsection (5) if P satisfies the PRA that P had taken such steps as a person in P's position could reasonably be expected to take to avoid the contravention occurring (or continuing). (7) For the purposes of subsection (5)— - “senior manager”, in relation to a relevant PRA-authorised person, means a person who has approval under section 59 to perform a designated senior management function in relation to the carrying on by the authorised person of a regulated activity; - “designated senior management function” means a function designated as a senior management function under section 59(6A) or (6B). (8) In this section— - “approved person”— 1. means a person in relation to whom— 1. the PRA has given its approval under section 59, or 2. the FCA has given its approval under section 59 in respect of the performance by the person of a relevant senior management function in relation to the carrying on by a PRA-authorised person of a regulated activity, and 2. in relation to an authorised person, means a person in relation to whom approval under section 59 is given on the application of the authorised person; - “employee”, in relation to a person, has the same meaning as in section 64A; - “relevant PRA-authorised person” means a PRA-authorised person that is a relevant authorised person; - “relevant senior management function” means a function which the PRA is satisfied is a senior management function as defined in section 59ZA (whether or not the function has been designated as such by the FCA). (9) For the meaning of “relevant authorised person”, see section 71A.

Meaning of “relevant authorised person”

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Recording information about senior managers

34

(1) Section 347 of FSMA 2000 (the record of authorised persons etc.) is amended as follows.

(2) In subsection (2)—

(a) in paragraph (g), after sub-paragraph (iii) insert—

(iv) in a case where the authorised person concerned is a relevant authorised person, whether or not the person is a senior manager;

;

(b) after that paragraph insert—

(h) in the case of an approved person who is a senior manager in relation to a relevant authorised person— (i) whether a final notice has been given to the person under section 390; and (ii) if so, any information about the matter to which the notice relates which has been published under section 391(4).

(3) After subsection (8) insert—

(8A) In this section— - “relevant authorised person” has the same meaning as in Part 5 (see section 71A), - “senior manager”, in relation to a relevant authorised person, means a person who has approval under section 59 to perform a designated senior management function in relation to the carrying on by the authorised person of a regulated activity, and - “designated senior management function” means a function designated as a senior management function under section 59(6A) or (6B).

(4) For subsection (9) substitute—

(9) The authorised person concerned”, in relation to an approved person, means the person on whose application approval was given.

Consequential amendments relating to Part 4

35

Schedule 3 (which contains further amendments relating to the provisions of this Part) has effect.

Offence

Offence relating to a decision causing a financial institution to fail

36

(1) A person (“S”) commits an offence if—

(a) at a time when S is a senior manager in relation to a financial institution (“F”), S—

(i) takes, or agrees to the taking of, a decision by or on behalf of F as to the way in which the business of a group institution is to be carried on, or

(ii) fails to take steps that S could take to prevent such a decision being taken,

(b) at the time of the decision, S is aware of a risk that the implementation of the decision may cause the failure of the group institution,

(c) in all the circumstances, S's conduct in relation to the taking of the decision falls far below what could reasonably be expected of a person in S's position, and

(d) the implementation of the decision causes the failure of the group institution.

(2) A “group institution”, in relation to a financial institution (“F”), means F or any other financial institution that is a member of F's group for the purpose of FSMA 2000 (see section 421 of that Act).

(3) Subsections (1) and (2) are to be read with the interpretative provisions in section 37.

(4) A person guilty of an offence under this section is liable—

(a) on summary conviction—

(i) in England and Wales, to imprisonment for a term not exceeding the general limit in a magistrates’ court (or 6 months, if the offence was committed before 2 May 2022) or a fine, or both;

(ii) in Scotland, to imprisonment for a term not exceeding 12 months or a fine not exceeding the statutory maximum, or both;

(iii) in Northern Ireland, to imprisonment for a term not exceeding 6 months or a fine not exceeding the statutory maximum, or both;

(b) on conviction on indictment, to imprisonment for a term not exceeding 7 years or a fine, or both.

Section 36: interpretation

37

(1) This section has effect for the interpretation of section 36.

(2) “Financial institution” means a UK institution which—

(a) meets condition A or B, and

(b) is not an insurer or a credit union.

(3) Condition A is that it has permission under Part 4A of FSMA 2000 to carry on the regulated activity of accepting deposits.

(4) Condition B is that—

(a) it is for the purposes of FSMA 2000 an investment firm (see section 424A of that Act),

(b) it has permission under Part 4A of that Act to carry on the regulated activity of dealing in investments as principal, and

(5) In subsection (2)—

(a) “UK institution” means an institution which is incorporated in, or formed under the law of any part of, the United Kingdom;

(b) “insurer” means an institution which is authorised under FSMA 2000 to carry on the regulated activity of effecting or carrying out contracts of insurance as principal;

(c) “credit union” means a credit union as defined by section 31 of the Credit Unions Act 1979 or a credit union as defined by Article 2(2) of the Credit Unions (Northern Ireland) Order 1985.

(6) Subsections (3), (4) and (5)(b) are to be read in accordance with sections 22 and 22A of FSMA 2000, taken with Schedule 2 to that Act and any order under section 22.

(7) A person is a “senior manager” in relation to a financial institution if, under an arrangement entered into by the institution, or by a contractor of the institution, in relation to the carrying on by the institution of a regulated activity, the person performs a senior management function.

(8) “Senior management function” means—

(a) a function of a description specified in rules made by the FCA under section 59(3)(a) or (b) of FSMA 2000 which is designated as a senior management function by the FCA under section 59(6A) of that Act;

(b) a function of a description specified in rules made by the PRA under section 59(3)(a) of that Act.

(9) A financial institution (“F”) is to be regarded as failing where—

(a) F enters insolvency,

(b) any of the stabilisation options in Part 1 of the Banking Act 2009 is achieved in relation to F, or

(c) F is taken for the purposes of the Financial Services Compensation Scheme to be unable, or likely to be unable, to satisfy claims against F.

(10) In subsection (9)(a) “insolvency” includes—

(a) bankruptcy,

(b) liquidation,

(ca) building society insolvency,

(cb) investment bank insolvency,

(d) administration,

(e) bank administration,

(ea) building society special administration,

(f) receivership,

(g) a composition between F and F's creditors, and

(h) a scheme of arrangement of F's affairs.

(11) For the purposes of subsection (10)—

“bank administration” has the same meaning as in the Banking Act 2009 (see section 136 of that Act);

“bank insolvency” has the same meaning as in that Act (see section 90 of that Act);

“building society insolvency” and “building society special administration” have the same meaning as in the Building Societies Act 1986 (see section 119 of that Act);

“investment bank insolvency” means any procedure established by regulations under section 233 of the Banking Act 2009.

Institution of proceedings

38

(1) In this section “an offence” means an offence under section 36.

(2) Proceedings for an offence may be instituted in England and Wales only—

(a) by the FCA, the PRA or the Secretary of State, or

(b) by or with the consent of the Director of Public Prosecutions.

(3) Proceedings for an offence may be instituted in Northern Ireland only—

(a) by the FCA, the PRA or the Secretary of State, or

(b) by or with the consent of the Director of Public Prosecutions for Northern Ireland.

(4) In exercising its power to institute proceedings for an offence, the FCA or the PRA must comply with any conditions or restrictions imposed in writing by the Treasury.

(5) Conditions or restrictions may be imposed under subsection (4) in relation to—

(a) proceedings generally, or

(b) such proceedings, or categories of proceedings, as the Treasury may direct.

PART 5 — Regulation of payment systems

Overview

39

(1) This Part contains provision for the establishment of a new body (the “Payment Systems Regulator”) to exercise functions in relation to payment systems.

(2) Section 40 provides for the establishment of the Payment Systems Regulator.

(3) Sections 41 and 42 contain definitions of “payment system” and related terms.

(4) Sections 43 to 48 make provision about designating a payment system as a regulated payment system.

(5) Sections 49 to 53 contain provision about the general duties of the Payment Systems Regulator under this Part.

(6) Sections 54 to 67 confer various regulatory and competition functions on the Payment Systems Regulator.

(7) Sections 68 to 70 contain provision about the making of complaints to the Payment Systems Regulator.

(8) Sections 71 to 80 contain provision about enforcement and appeals.

(9) Sections 81 to 95 contain information and investigation powers and provision about the disclosure of information.

(10) Sections 96 to 97D contain supplementary powers.

(11) Sections 98 to 102 contain provision about the Payment Systems Regulator's relationship with other regulators.

(11A) Sections 102A and 102B contain provision about Treasury powers to make recommendations in connection with the Payment Systems Regulator’s general duties and to specify matters to which the Regulator must have regard when exercising certain functions.

(12) Sections 103 to 107A contain provision about consultation, accountability and oversight.

(13) Sections 108 to 110 contain miscellaneous and supplemental provision.

The Payment Systems Regulator

40

(1) The FCA must establish a body corporate to exercise the functions conferred on the body by or under this Part.

(2) The body established under subsection (1) is referred to in this Part as the Payment Systems Regulator.

(3) The FCA must take such steps as are necessary to ensure that the Payment Systems Regulator is, at all times, capable of exercising the functions referred to in subsection (1).

(4) In complying with the duty imposed by subsection (3) the FCA may, in particular—

(a) provide staff to the Payment Systems Regulator, and

(b) provide services to the Payment Systems Regulator which the FCA considers would facilitate the exercise of any of those functions.

(5) Schedule 4 (which contains further provision about the Payment Systems Regulator) has effect.

“Payment system” etc

Meaning of “payment system”

41

(1) In this Part “payment system” means a system which is operated by one or more persons in the course of business for the purpose of enabling persons to make transfers of funds, and includes a system which is designed to facilitate the transfer of funds using another payment system.

(2) But “payment system” does not include—

(a) any arrangements for the physical movement of cash;

(b) a system which does not make any provision for the transfer of funds by payers, or to recipients, in the United Kingdom;

(d) a system operated by a recognised clearing house or a recognised CSD;

(e) any other system whose primary purpose is not that of enabling persons to transfer funds.

(2A) In this Part—

“funds” includes digital settlement assets (except in section 41(2)(e));

“digital settlement asset” means a digital representation of value or rights, whether or not cryptographically secured, that—can be used for the settlement of payment obligations,can be transferred, stored or traded electronically, anduses technology supporting the recording or storage of data (which may include distributed ledger technology).

(2B) In this section, “digital settlement asset” includes a right to, or interest in, a digital settlement asset.

(2C) The Treasury may by regulations amend the definition of “digital settlement asset” in subsection (2A).

(3) In this section—

“recognised CSD” has the meaning given by section 285(1) of FSMA 2000;

“recognised clearing house” has the meaning given by section 285(1) of FSMA 2000;

“securities settlement system” means a computer-based system, and procedures, which enable title to units of a security to be evidenced and transferred without a written instrument, and which facilitate supplementary and incidental matters.

(4) The Treasury may by order amend this section so as to—

(a) add descriptions of systems or arrangements that are not to be regarded as payment systems, or

(b) vary or remove any such description.

Participants in payment systems etc

42

(1) This section applies for the purposes of this Part.

(2) The following persons are “participants” in a payment system—

(a) the operator of the payment system (see subsection (3));

(b) any infrastructure provider (see subsection (4));

(But see also subsection (8).)

(3) “Operator”, in relation to a payment system, means any person with responsibility under the system for managing or operating it; and any reference to the operation of a payment system includes a reference to its management.

(4) “Infrastructure provider”, in relation to a payment system, means any person who provides or controls any part of the infrastructure used for the purposes of operating the payment system.

(5) “Payment service provider”, in relation to a payment system, means any person who provides services to persons who are not participants in the system for the purposes of enabling the transfer of funds using the payment system.

(5A) “Payment service provider” in relation to a payment system that includes arrangements using digital settlement assets means—

(a) a person responsible for managing the issuance and redemption of digital settlement assets;

(b) a person whose business or occupation is to safeguard, or to safeguard and administer digital settlement assets, including their private cryptographic keys (or means of access);

(d) a person who—

(i) sets rules, standards, or conditions of access or participation in relation to the system, or

(ii) provides any service that facilitates, or supports, a transfer of money or digital settlement assets to be made using the system, including any infrastructure provider in relation to the system.

(6) A payment service provider has “direct access” to a payment system if the payment service provider is able to provide services for the purposes of enabling the transfer of funds using the payment system as a result of arrangements made between the payment service provider and the operator of the payment system.

(7) Any reference to participation in a payment system is to be read in accordance with this section, and in particular—

(a) in the case of an operator of a payment system, includes a reference to developing the system, and

(b) in the case of a payment service provider with direct access to a payment system, includes a reference to entering into an agreement with a person to enable the person to become a payment service provider in relation to the system.

(8) The Bank of England is not to be regarded as a participant of any kind in any payment system.

Designation as a regulated payment system

Designation orders

43

(1) The Treasury may by order (a “designation order”) designate a payment system as a regulated payment system for the purposes of this Part.

(2) A designation order must specify in as much detail as is reasonably practicable the arrangements that constitute the payment system.

Designation criteria

44

(1) The Treasury may make a designation order in respect of a payment system only if they are satisfied that any deficiencies in the design of the system, or any disruption of its operation, would be likely to have serious consequences for those who use, or are likely to use, the services provided by the system.

(2) In considering whether to make a designation order in respect of a payment system, the Treasury must have regard to—

(a) the number and value of the transactions that the system presently processes or is likely to process in the future,

(b) the nature of the transactions that the system presently processes or is likely to process in the future,

(d) the relationship between the system and other payment systems.

Procedure

45

(1) Before making a designation order in respect of a payment system the Treasury must—

(a) consult the Payment Systems Regulator and, if the system is a recognised ... payment system, the Bank of England,

(b) notify the operator of the system, and

(2) In considering whether to make a designation order in respect of a payment system, the Treasury may rely on information provided by—

(a) the Bank of England,

(b) the FCA,

(d) the Payment Systems Regulator.

Amendment of designation order

46

(1) The Treasury may amend a designation order.

(2) Before amending a designation order made in respect of a payment system, the Treasury must—

(a) consult the Payment Systems Regulator and, if the payment system is a recognised ... payment system, the Bank of England,

(b) notify the operator of the payment system, and

(3) The Treasury must consider any request by the operator of a regulated payment system for the amendment of its designation order.

Revocation of designation orders

47

(1) The Treasury may revoke a designation order.

(2) The Treasury must revoke a designation order if they are not satisfied that the criteria in section 44 are met in respect of the payment system to which the order relates.

(3) Before revoking a designation order made in respect of a payment system, the Treasury must—

(a) consult the Payment Systems Regulator and, if the payment system is a recognised ... payment system, the Bank of England,

(b) notify the operator of the payment system, and

(4) The Treasury must consider any request by the operator of a regulated payment system for the revocation of its designation order.

Publication

48

(1) The Treasury must publish any designation order.

(2) If the Treasury amends a designation order, the Treasury must publish the amended order.

(3) The Treasury must publish any revocation of a designation order.

General duties of Regulator

Regulator’s general duties in relation to payment systems

49

(1) In discharging its general functions relating to payment systems the Payment Systems Regulator must, so far as is reasonably possible, act in a way which advances one or more of its payment systems objectives.

(2) The payment systems objectives of the Payment Systems Regulator are—

(a) the competition objective (see section 50),

(b) the innovation objective (see section 51), and

(3) In discharging its general functions relating to payment systems the Payment Systems Regulator must have regard to—

(a) the importance of maintaining the stability of, and confidence in, the UK financial system,

(b) the importance of payment systems in relation to the performance of functions by the Bank of England in its capacity as a monetary authority, and

(4) The general functions of the Payment Systems Regulator relating to payment systems are—

(a) its function of giving general directions under section 54 (considered as a whole),

(b) its functions in relation to the giving of general guidance under section 96 (considered as a whole), and

(c) its function of determining the general policy and principles by reference to which it performs particular functions.

The competition objective

50

(1) The competition objective is to promote effective competition in—

(a) the market for payment systems, and

(b) the markets for services provided by payment systems,

in the interests of those who use, or are likely to use, services provided by payment systems.

(2) The reference in subsection (1) to promoting effective competition includes, in particular, promoting effective competition—

(a) between different operators of payment systems,

(b) between different payment service providers, and

(3) The matters to which the Payment Systems Regulator may have regard in considering the effectiveness of competition in a market mentioned in subsection (1) include—

(a) the needs of different persons who use, or may use, services provided by payment systems;

(b) the ease with which persons who may wish to use those services can do so;

(d) the needs of different payment service providers or persons who wish to become payment service providers;

(e) the ease with which payment service providers, or persons who wish to become payment service providers, can provide services using payment systems;

(f) the ease with which payment service providers can change the payment system they use to provide their services;

(g) the needs of different infrastructure providers or persons who wish to become infrastructure providers;

(h) the ease with which infrastructure providers, or persons who wish to become infrastructure providers, can provide infrastructure for the purposes of operating payment systems;

(i) the needs of different operators of payment systems;

(j) the ease with which operators of payment systems can change the infrastructure used to operate the payment systems;

(k) the level and structure of fees, charges or other costs associated with participation in payment systems;

(l) the ease with which new entrants can enter the market;

(m) how far competition is contributing to the development of efficient and effective infrastructure for the purposes of operating payment systems;

(n) how far competition is encouraging innovation.

The innovation objective

51

(1) The innovation objective is to promote the development of, and innovation in, payment systems in the interests of those who use, or are likely to use, services provided by payment systems, with a view to improving the quality, efficiency and economy of payment systems.

(2) The reference in subsection (1) to promoting the development of, and innovation in, payment systems includes, in particular, a reference to promoting the development of, and innovation in, infrastructure to be used for the purposes of operating payment systems.

The service-user objective

52

The service-user objective is to ensure that payment systems are operated and developed in a way that takes account of, and promotes, the interests of those who use, or are likely to use, services provided by payment systems.

Regulatory principles

53

The regulatory principles referred to in section 49(3)(c) are as follows—

(a) the need to use the resources of the Payment Systems Regulator in the most efficient and economic way;

(b) the principle that a burden or restriction which is imposed on a person, or on the carrying on of an activity, should be proportionate to the benefits, considered in general terms, which are expected to result from the imposition of that burden or restriction;

(c) the desirability of sustainable growth in the economy of the United Kingdom in the medium or long term , including in a way consistent with contributing towards achieving compliance by the Secretary of State with section 1 of the Climate Change Act 2008 (UK net zero emissions target) and section 5 of the Environment Act 2021 (environmental targets) where the Payment Systems Regulator considers the exercise of its functions to be relevant to the making of such a contribution;

(d) the general principle that those who use services provided by payment systems should take responsibility for their decisions;

(e) the responsibilities of the senior management of persons subject to requirements imposed by or under this Part, including those affecting persons who use services provided by payment systems, in relation to compliance with those requirements;

(f) the desirability where appropriate of the Payment Systems Regulator exercising its functions in a way that recognises differences in the nature of, and objectives of, businesses carried on by different persons subject to requirements imposed by or under this Part;

(g) the desirability in appropriate cases of the Payment Systems Regulator publishing information relating to persons on whom requirements are imposed by or under this Part, or requiring such persons to publish information, as a means of contributing to the advancement by the Payment Systems Regulator of its payment systems objectives;

(h) the principle that the Payment Systems Regulator should exercise its functions as transparently as possible.

Regulatory and competition functions

Directions

54

(1) The Payment Systems Regulator may give directions in writing to participants in regulated payment systems.

(2) A direction given to a participant in a regulated payment system may—

(a) require or prohibit the taking of specified action in relation to the system;

(b) set standards to be met in relation to the system.

(3) A direction under this section may apply—

(a) generally,

(b) in relation to—

(i) all operators, or every operator of a regulated payment system of a specified description,

(ii) all infrastructure providers, or every person who is an infrastructure provider in relation to a regulated payment system of a specified description, or

(iii) all payment service providers, or every person who is a payment service provider in relation to a regulated payment system of a specified description, or

(4) The Payment Systems Regulator must publish any direction given under this section that applies as mentioned in subsection (3)(a) or (b).

(5) A direction under this section that applies as mentioned in subsection (3)(a) or (b) is referred to in this Part as a “general direction”.

System rules

55

(1) The Payment Systems Regulator may require the operator of a regulated payment system—

(a) to establish rules for the operation of the system;

(b) to change the rules in a specified way or so as to achieve a specified purpose;

(d) not to change the rules without the approval of the Payment Systems Regulator.

(2) A requirement under subsection (1)(c) or (d) may be general or specific.

(3) A requirement under this section that is imposed on—

(a) all operators of regulated payment systems, or

(b) every operator of a regulated payment system of a specified description,

is referred to in this Part as a “generally-imposed requirement”.

Power to require granting of access to payment systems

56

(1) This section applies where a person (“the applicant”) applies for an order under this section.

(2) The Payment Systems Regulator may by order require the operator of a regulated payment system to enable the applicant to become a payment service provider in relation to the system.

(3) The Payment Systems Regulator may by order require any payment service provider with direct access to a regulated payment system to enter into an agreement with the applicant to enable the applicant to become a payment service provider in relation to the system.

(4) An order under this section may provide for the applicant to become a payment service provider in relation to a payment system—

(a) for a period specified in the order;

(b) on terms and conditions specified in the order.

Variation of agreements relating to payment systems

57

(1) This section applies to the following agreements—

(a) any agreement made between the operator of a regulated payment system and a payment service provider;

(b) any agreement made between a payment service provider with direct access to a regulated payment system and another person for the purpose of enabling that other person to become a payment service provider in relation to the system;

(i) participation in a regulated payment system, or

(ii) the use of services provided by a regulated payment system.

(2) The Payment Systems Regulator may, on the application of a party to an agreement to which this section applies, vary the agreement by—

(a) varying any of the fees or charges payable under the agreement, or

(b) in the case of an agreement within subsection (1)(a) or (b), varying any other terms and conditions relating to the payment service provider's participation in the payment system.

(3) In the case of an agreement within subsection (1)(b), the reference in subsection (2)(b) to the payment service provider is to the payment service provider which does not have direct access to the payment system.

(4) The power under this section to vary any fee or charge includes power to specify a maximum fee or charge.

(5) If the Payment Systems Regulator varies an agreement under this section, the agreement has effect subject to the variation.

Power to require disposal of interest in payment system

58

(1) The Payment Systems Regulator may require a person who has an interest in —

(a) the operator of a regulated payment system, or

(b) an infrastructure provider in relation to such a system,

to dispose of all or part of that interest.

(2) The power conferred by subsection (1) may be exercised only if the Payment Systems Regulator is satisfied that, if the power is not exercised, there is likely to be a restriction or distortion of competition in—

(a) the market for payment systems, or

(b) a market for services provided by payment systems.

(2A) The reference in subsection (2) to a restriction or distortion of competition includes, in particular, a restriction or distortion of competition—

(a) between different operators of payment systems,

(b) between different payment services providers, or

(3) The Payment Systems Regulator may not exercise the power conferred by subsection (1) without the consent of the Treasury.

(4) If the Payment Systems Regulator decides to exercise the power conferred by subsection (1) in relation to a person who has an interest in the operator of a regulated payment system—

(a) the Payment Systems Regulator must notify the relevant competition authorities (see subsection (5)), and

(b) the relevant competition authorities may not take any action in relation to the person that would require the person to dispose of all or part of that interest.

(5) The relevant competition authorities are—

(a) the Secretary of State,

(b) the Competition and Markets Authority, and

The Regulator’s functions under Part 4 of the Enterprise Act 2002

59

(1) The functions to which this subsection applies are to be concurrent functions of the Payment Systems Regulator and the Competition and Markets Authority (“the CMA”).

(2) Subsection (1) applies to the functions of the CMA under Part 4 of the Enterprise Act 2002 (market investigations), so far as those functions—

(a) are exercisable by the CMA Board (within the meaning of Schedule 4 to the Enterprise and Regulatory Reform Act 2013), and

(b) relate to participation in payment systems.

(3) But subsection (1) does not apply to functions under the following sections of the Enterprise Act 2002—

section 166 (duty to maintain register of undertakings and orders);

section 167C (statement of policy in relation to functions under sections 167 and 167A);

section 171 (duty to publish guidance).

section 174E (statement of policy on penalties).

(4) So far as is necessary for the purposes of, or in connection with, subsections (1) and (2)—

(a) references in Part 4 of the Enterprise Act 2002 to the CMA (including references in provisions of that Act applied by that Part) are to be read as including references to the Payment Systems Regulator,

(b) references in that Part to section 5 of that Act are to be read as including references to section 64 of this Act, and

(c) references in that Part to consumers are to be read as including references to any person who uses, or is likely to use, services provided by payment systems in the course of a business carried on by the person.

(5) But subsection (4) does not apply—

(a) in relation to section 166 , 167C, 171 or 174E of that Act, or

(b) where the context otherwise requires.

(6) Section 130A of the Enterprise Act 2002 is to have effect in relation to the Payment Systems Regulator by virtue of subsections (1) and (2) as if—

(a) in subsection (2)(a) of that section, the reference to the acquisition or supply of goods or services of one or more than one description in the United Kingdom were a reference to the participation in payment systems used to provide services in the United Kingdom, and

(b) in subsection (2)(b) of that section, the reference to the extent to which steps can and should be taken were a reference to the extent to which steps that might include steps under Part 4 of that Act can and should be taken.

(7) In making any decision, or otherwise taking action, for the purposes of any of its functions that, by virtue of this section, are functions exercisable concurrently with the CMA, the Payment Systems Regulator must have regard to the need for making a decision, or taking action, as soon as reasonably practicable.

Restrictions on exercise of functions under Part 4 of the Enterprise Act 2002

60

(1) Before the CMA or the Payment Systems Regulator first exercises any of the concurrent functions in relation to any matter, it must consult the other.

(2) Neither the CMA nor the Payment Systems Regulator may exercise any of the concurrent functions in relation to any matter if any of those functions have been exercised in relation to that matter by the other.

(3) In subsections (1) and (2) “the concurrent functions” means the functions which by virtue of section 59 are concurrent functions of the Payment Systems Regulator and the CMA.

(4) Before the FCA or the Payment Systems Regulator first exercises any of the concurrent functions in relation to any matter, it must consult the other.

(5) Neither the FCA nor the Payment Systems Regulator may exercise any of the concurrent functions in relation to any matter if any of those functions have been exercised in relation to that matter by the other.

(6) In subsections (4) and (5) “the concurrent functions”—

(a) in relation to the Payment Systems Regulator, means the functions which by virtue of section 59 are concurrent functions of the Payment Systems Regulator and the CMA, and

(b) in relation to the FCA, means the functions which by virtue of section 234I of FSMA 2000 are concurrent functions of the FCA and the CMA.

(7) In this section “the CMA” means the Competition and Markets Authority.

The Regulator’s functions under the Competition Act 1998

61

(1) The functions to which this subsection applies are to be concurrent functions of the Payment Systems Regulator and the Competition and Markets Authority (“the CMA”).

(2) Subsection (1) applies to the functions of the CMA under the provisions of Part 1 of the Competition Act 1998, so far as relating to any of the following that relate to participation in payment systems—

(a) agreements, decisions or concerted practices of the kind mentioned in section 2(1) of that Act,

(b) conduct of the kind mentioned in section 18(1) of that Act, and

(c) transferred EU anti-trust commitments or transferred EU anti-trust directions (as defined in section 40ZA of that Act).

(3) But subsection (1) does not apply to functions under the following sections of that Act—

section 31D(1) to (6) (duty to publish guidance);

section 35C (statement of policy in relation to functions under sections 31E, 34 and 35A);

section 38(1) to (6) (duty to publish guidance about penalties);

section 40B(1) to (4) (duty to publish statement of policy on penalties);

section 51 (rules).

(4) So far as necessary for the purposes of, or in connection with, the provisions of subsections (1) and (2), references to the CMA in Part 1 of the Competition Act 1998 (including references in provisions of the Enterprise Act 2002 applied by that Part) are to be read as including references to the Payment Systems Regulator.

(5) But subsection (4) does not apply—

(a) in relation to sections 31D(1) to (6) , 35C, 38(1) to (6), 40B(1) to (4), 51, 52(6) and (8) and 54 of that Act, or

(b) where the context otherwise requires.

(6) In making any decision, or otherwise taking action, for the purposes of any of its functions that—

(a) by virtue of this section, are functions exercisable concurrently with the CMA, and

(b) are functions within Schedule 4A to the Enterprise and Regulatory Reform Act 2013 by virtue of paragraph 5 of that Schedule,

the Payment Systems Regulator must have regard to the need for making a decision, or taking action, as soon as reasonably practicable.

Duty to consider exercise of powers under Competition Act 1998

62

(1) Before exercising any power within subsection (2), the Payment Systems Regulator must consider whether it would be more appropriate to proceed under the Competition Act 1998.

(2) The powers referred to in subsection (1) are—

(a) its power to give a direction under section 54 (apart from the power to give a general direction);

(b) its power to impose a requirement under section 55 (apart from the power to impose a generally-imposed requirement);

(3) The Payment Systems Regulator must not exercise the power if it considers that it would be more appropriate to proceed under the Competition Act 1998.

Provision of information and assistance to a CMA group

63

(1) For the purpose of assisting a CMA group in carrying out a relevant investigation, the Payment Systems Regulator must give the CMA group—

(a) any relevant information which it has in its possession, and

(b) any other assistance which the CMA group may reasonably require in relation to any matters falling within the scope of the investigation.

(2) A “relevant investigation” is an investigation carried out on a reference made by the Payment Systems Regulator under section 131 of the Enterprise Act 2002 by virtue of section 59.

(3) “Relevant information”, in relation to a relevant investigation, is information—

(a) which relates to matters falling within the scope of the investigation, and

(b) which—

(i) is requested by the CMA group for the purpose of the investigation, or

(ii) in the opinion of the Payment Systems Regulator, it would be appropriate to give to the CMA group for that purpose.

(4) A CMA group, in carrying out a relevant investigation, must take into account any information given to it under this section.

(5) In this section “CMA group” has the same meaning as in Schedule 4 to the Enterprise and Regulatory Reform Act 2013.

Function of keeping markets under review

64

(1) For the purpose of the functions conferred on it by sections 58 to 63 the Payment Systems Regulator is to have the function of keeping under review—

(a) the market for payment systems, and

(b) the markets for services provided by payment systems.

(2) The function conferred by subsection (1) is to be carried out with a view to (among other things) ensuring that the Payment Systems Regulator has sufficient information to take informed decisions and to carry out its other functions effectively.

Exclusion of general duties

65

(1) Section 49 (the Payment Systems Regulator's general duties) does not apply in relation to anything done by the Payment Systems Regulator in the carrying out of its functions by virtue of sections 59 to 63.

(2) But in the carrying out of any functions by virtue of sections 59 to 63, the Payment Systems Regulator may have regard to any of the matters in respect of which a duty is imposed by section 49 if it is a matter to which the Competition and Markets Authority is entitled to have regard in the carrying out of those functions.

Concurrent competition powers: supplementary provision

66

(1) If any question arises as to whether, by virtue of section 59 or 61, any functions fall to be, or are capable of being, carried out by the Payment Systems Regulator in relation to any particular case, that question is to be referred to, and determined by, the Treasury.

(2) No objection is to be taken to anything done under the Competition Act 1998 or Part 4 of the Enterprise Act 2002 by or in relation to the Payment Systems Regulator on the ground that it should have been done by or in relation to the Competition and Markets Authority.

Amendments relating to Regulator’s competition powers

67

(1) In section 9E of the Company Directors Disqualification Act 1986 (interpretation of sections 9A to 9D), in subsection (2), after paragraph (f) insert—

(g) the Payment Systems Regulator established under section 40 of the Financial Services (Banking Reform) Act 2013.

(2) In section 54 of the Competition Act 1998 (regulators), in subsection (1), omit the “and” at the end of paragraph (g) and after paragraph (h) insert—

(i) the Payment Systems Regulator established under section 40 of the Financial Services (Banking Reform) Act 2013.

(3) In section 136 of the Enterprise Act 2002 (investigations and reports on market investigation references)—

(a) in subsection (7), at the end insert—

(j) in relation to the Payment Systems Regulator, section 59 of the Financial Services (Banking Reform) Act 2013.

;

(b) in subsection (8), for “or Monitor” substitute “ , Monitor or the Payment Systems Regulator. ”;

(10) In this section “the Payment Systems Regulator” means the body established under section 40 of the Financial Services (Banking Reform) Act 2013.

(4) In section 52(4) of the Enterprise and Regulatory Reform Act 2013 (power to remove concurrent competition functions of sectoral regulators), after paragraph (f) insert—

(g) the Payment Systems Regulator established under section 40 of the Financial Services (Banking Reform) Act 2013.

(5) In Schedule 4 to the Enterprise and Regulatory Reform Act 2013 (the Competition and Markets Authority), in paragraph 16 (concurrency report), at the end of sub-paragraph (7) insert—

(h) the Payment Systems Regulator established under section 40 of the Financial Services (Banking Reform) Act 2013.

Complaints

Complaints by representative bodies

68

(1) A designated representative body may make a complaint to the Payment Systems Regulator that a feature, or combination of features, of a market in the United Kingdom for services provided by payment systems is, or appears to be, significantly damaging the interests of those who use, or are likely to use, those services (“service-users”).

(2) “Designated representative body” means a body designated by the Treasury by order.

(3) The Treasury—

(a) may designate a body only if it appears to them to represent the interests of service-users of any description, and

(b) must publish in such manner as they think fit (and may from time to time vary) criteria to be applied by them in determining whether to make or revoke a designation.

(4) The reference in subsection (1) to a feature of a market in the United Kingdom for services provided by payment systems is a reference to—

(a) the structure of the market concerned or any aspect of that structure,

(b) any conduct (whether or not in the market concerned) of one or more than one person who supplies or acquires services in the market concerned, or

and “conduct” includes any failure to act (whether or not intentional) and any other unintentional conduct.

(5) In this section “market in the United Kingdom” includes a market which operates only in a part of the United Kingdom.

(6) In section 234C of FSMA 2000 (complaints by consumer bodies), after subsection (1) insert—

(1A) But a complaint may not be made to the FCA under this section if it is a complaint which could be made to the Payment Systems Regulator by a designated representative body under section 68 of the Financial Services (Banking Reform) Act 2013 (complaints by representative bodies). “Designated representative body” and “the Payment Systems Regulator” have the same meaning in this subsection as they have in that section.

Response by Regulator

69

(1) The Payment Systems Regulator must within 90 days after the day on which it receives a complaint under section 68 publish a response stating how it proposes to deal with the complaint, and in particular—

(a) whether it has decided to take any action, or to take no action, and

(b) if it has decided to take action, what action it proposes to take.

(2) The response must—

(a) include a copy of the complaint, and

(b) state the Payment Systems Regulator's reasons for its proposals.

(3) The Treasury may by order amend subsection (1) by substituting any period for the period for the time being specified there.

Complaints: guidance

70

(1) The guidance given by the Payment Systems Regulator under section 96—

(a) must include guidance about the presentation of a reasoned case for a complaint under section 68, and

(b) may include guidance about any other matters that appear to the Payment Systems Regulator to be appropriate for the purposes of that section.

(2) Guidance given in accordance with subsection (1) is to be treated as general guidance for the purposes of this Part.

Enforcement and appeals

Meaning of “compliance failure”

71

In this Part “compliance failure” means a failure by a participant in a regulated payment system to—

(a) comply with a direction given under section 54, ...

(b) comply with a requirement imposed under section 55 or 56 ; or

Publication of compliance failures etc

72

(1) The Payment Systems Regulator may publish details of a compliance failure by a participant in a regulated payment system.

(2) The Payment Systems Regulator may publish details of a sanction imposed under section 73.

Penalties

73

(1) The Payment Systems Regulator may require a participant in a regulated payment system to pay a penalty in respect of a compliance failure.

(2) A penalty—

(a) must be paid to the Payment Systems Regulator, and

(b) may be enforced by the Payment Systems Regulator as a debt.

(3) The Payment Systems Regulator must prepare a statement of the principles which it will apply in determining—

(a) whether to impose a penalty, and

(b) the amount of a penalty.

(4) The Payment Systems Regulator must—

(a) publish the statement on its website,

(b) send a copy to the Treasury,

(c) review the statement from time to time and revise it if necessary (and paragraphs (a) and (b) apply to a revision), and

(d) in applying the statement to a compliance failure, apply the version in force when the compliance failure occurred.

Warning notices

74

(1) Before imposing a sanction on any person the Payment Systems Regulator must—

(a) give the person a notice in writing (a “warning notice”),

(b) give the person at least 21 days to make representations,

(d) as soon as is reasonably practicable, give the person a notice in writing stating whether or not it intends to impose the sanction.

(2) In subsection (1) any reference to imposing a sanction is a reference to—

(a) publishing details under section 72(1), or

(b) requiring the payment of a penalty under section 73.

Injunctions

75

(1) If, on the application of the Payment Systems Regulator, the court is satisfied—

(a) that there is a reasonable likelihood that there will be a compliance failure, or

(b) that there has been a compliance failure and there is a reasonable likelihood that it will continue or be repeated,

the court may make an order restraining the conduct constituting the failure.

(2) If, on the application of the Payment Systems Regulator, the court is satisfied—

(a) that there has been a compliance failure by a participant in a regulated payment system, and

(b) that there are steps which could be taken for remedying the failure,

the court may make an order requiring the participant, and anyone else who appears to have been knowingly concerned in the failure, to take such steps as the court may direct to remedy it.

(3) If, on the application of the Payment Systems Regulator, the court is satisfied—

(a) that there may have been a compliance failure by a participant in a regulated payment system, or

(b) that a person may have been knowingly concerned in a compliance failure,

the court may make an order restraining the participant or the person (as the case may be) from dealing with any assets which it is satisfied the participant or person is reasonably likely to deal with.

(4) The jurisdiction conferred by this section is exercisable—

(a) in England and Wales and Northern Ireland, by the High Court, and

(b) in Scotland, by the Court of Session.

(5) In this section—

(a) references to an order restraining anything are, in Scotland, to be read as references to an interdict prohibiting that thing,

(b) references to remedying a failure include mitigating its effect, and

Appeals: general

76

(1) A person who is affected by any of the following decisions of the Payment Systems Regulator may appeal against the decision—

(a) a decision to give a direction under section 54 (other than a general direction),

(b) a decision to impose a requirement under section 55 (other than a generally-imposed requirement),

(d) a decision to impose a sanction.

(2) In subsection (1) the reference to imposing a sanction is a reference to—

(a) publishing details under section 72(1), or

(b) requiring the payment of a penalty under section 73.

(3) If the decision is a CAT-appealable decision, the appeal must be made to the Competition Appeal Tribunal in accordance with section 77.

(4) A “CAT-appealable decision” means—

(a) a decision to give a direction under section 54,

(b) a decision to impose a requirement under section 55, or

(5) If the decision is a decision to impose a penalty on the person under section 73, the appeal must be made to the Competition Appeal Tribunal in accordance with section 78.

(6) If the decision is a CMA-appealable decision, the appeal must be made to the Competition and Markets Authority (“the CMA”) in accordance with section 79.

(7) A “CMA-appealable decision” means—

(a) a decision to impose a requirement under section 56,

(b) a decision to vary an agreement under section 57, or

(8) The permission of the CMA is required for an appeal to be made in accordance with section 79.

(9) The CMA may refuse permission for an appeal only if—

(a) the appeal is made for reasons that are trivial or vexatious, or

(b) the appeal has no reasonable prospect of success.

Appeals to Competition Appeal Tribunal

77

(1) This section applies where a person is appealing to the Competition Appeal Tribunal (“the Tribunal”) against a CAT-appealable decision.

(2) The means of making an appeal is by sending the Tribunal a notice of appeal in accordance with Tribunal rules.

(3) The notice of appeal must be sent within the period specified, in relation to the decision appealed against, in those rules.

(4) In determining an appeal made in accordance with this section, the Tribunal must apply the same principles as would be applied by a court on an application for judicial review.

(5) The Tribunal must either—

(a) dismiss the appeal, or

(b) quash the whole or part of the decision to which the appeal relates.

(6) If the Tribunal quashes the whole or part of a decision, it may refer the matter back to the Payment Systems Regulator with a direction to reconsider and make a new decision in accordance with its ruling.

(7) The Tribunal may not direct the Payment Systems Regulator to take any action which it would not otherwise have the power to take in relation to the decision.

(8) The effect of a decision to publish details under section 72(1) is suspended by the making of an appeal against the decision (and the details may not be published until the appeal has been determined).

(9) The effect of any other CAT-appealable decision is not suspended by the making of an appeal against the decision.

(10) In this section and section 78 “Tribunal rules” means rules under section 15 of the Enterprise Act 2002.

Appeals in relation to penalties

78

(1) This section applies where a person is appealing to the Competition Appeal Tribunal (“the Tribunal”) against a decision to impose a penalty under section 73.

(2) The person may appeal against—

(a) the imposition of the penalty,

(b) the amount of the penalty, or

(3) The means of making an appeal is by sending the Tribunal a notice of appeal in accordance with Tribunal rules.

(4) The notice of appeal must be sent within the period specified, in relation to the decision appealed against, in those rules.

(5) The Tribunal may do any of the following—

(a) uphold the penalty;

(b) set aside the penalty;

(d) vary any date by which the penalty, or any part of it, is required to be paid.

(6) If an appeal is made in accordance with this section, the penalty is not required to be paid until the appeal has been determined.

(7) Subsections (2), (5) and (6) do not restrict the power to make Tribunal rules; and those subsections are subject to Tribunal rules.

(8) Except as provided by this section, the validity of the penalty may not be questioned by any legal proceedings whatever.

(9) In the case of an appeal made in accordance with this section, a decision of the Tribunal has the same effect as, and may be enforced in the same manner as, a decision of the Payment Systems Regulator.

Appeals to Competition and Markets Authority

79

(1) This section applies where a person is appealing to the Competition and Markets Authority (“the CMA”) against a CMA-appealable decision.

(2) In determining the appeal the CMA must have regard, to the same extent as is required of the Payment Systems Regulator, to the matters to which the Payment Systems Regulator must have regard in discharging its functions under this Part.

(3) In determining the appeal the CMA—

(a) may have regard to any matter to which the Payment Systems Regulator was not able to have regard in relation to the decision, but

(b) must not, in the exercise of that power, have regard to any matter to which the Payment Systems Regulator would not have been entitled to have regard in reaching its decision had it had the opportunity of doing so.

(4) The CMA must either—

(a) dismiss the appeal, or

(b) quash the whole or part of the decision to which the appeal relates.

(5) The CMA may act as mentioned in subsection (4)(b) only to the extent that it is satisfied that the decision was wrong on one or more of the following grounds—

(a) that the Payment Systems Regulator failed properly to have regard to any matter mentioned in subsection (2);

(b) that the Payment Systems Regulator failed to give the appropriate weight to any matter mentioned in subsection (2);

(d) that the decision was wrong in law.

(6) If the CMA quashes the whole or part of a decision, it may either—

(a) refer the matter back to the Payment Systems Regulator with a direction to reconsider and make a new decision in accordance with its ruling, or

(b) substitute its own decision for that of the Payment Systems Regulator.

(7) The CMA may not direct the Payment Systems Regulator to take any action which it would not otherwise have the power to take in relation to the decision.

(8) Schedule 5 contains further provision about the making of appeals in accordance with this section.

Enforcement of requirement to dispose of interest in payment system

80

(1) A requirement imposed under section 58 is enforceable by civil proceedings brought by the Payment Systems Regulator for an injunction or for interdict or for any other appropriate relief or remedy.

(2) Civil proceedings may not be brought to enforce a requirement imposed under that section unless—

(a) the time for bringing an appeal against the decision to impose the requirement has expired and no appeal has been brought within that time, or

(b) the person on whom the requirement was imposed has within that time brought such an appeal and the appeal has been dismissed or withdrawn.

Information and investigation powers

Power to obtain information or documents

81

(1) The Payment Systems Regulator may by notice in writing require a person to provide information or documents—

(a) which the Payment Systems Regulator thinks will help the Treasury in determining whether to make a designation order, or

(b) which the Payment Systems Regulator otherwise requires in connection with its functions under this Part.

(2) In particular, a notice under subsection (1) may require a participant in a regulated payment system to notify the Payment Systems Regulator if events of a specified kind occur.

(3) A notice under subsection (1) may require information or documents to be provided—

(a) in a specified form or manner;

(b) at a specified time;

Reports by skilled persons

82

(1) The Payment Systems Regulator may—

(a) require a person who is a participant in a regulated payment system to provide the Payment Systems Regulator with a report on any matter relating to the person's participation in the system (“the matter concerned”), or

(b) appoint a person to provide the Payment Systems Regulator with a report on the matter concerned.

The person whose participation in the payment system is to be the subject of the report is referred to in this section as “the relevant participant”.

(2) The power conferred by subsection (1)(a) is exercisable by giving the relevant participant a notice in writing.

(3) When acting under subsection (1)(a), the Payment Systems Regulator may require the report to be in a form specified in the notice.

(4) The Payment Systems Regulator must give written notice of an appointment under subsection (1)(b) to the relevant participant.

(5) A person appointed to make a report under this section—

(a) must be a person appearing to the Payment Systems Regulator to have the skills necessary to make a report on the matter concerned, and

(b) where the appointment is to be made by the relevant participant, must be a person nominated or approved by the Payment Systems Regulator.

(6) It is the duty of—

(a) the relevant participant, and

(b) any person who is providing (or who has at any time provided) services to the relevant participant in relation to the matter concerned,

to give the person appointed to prepare a report all such assistance as the appointed person may reasonably require.

(7) The obligation imposed by subsection (6) is enforceable, on the application of the Payment Systems Regulator, by an injunction or, in Scotland, by an order for specific performance under section 45 of the Court of Session Act 1988.

(8) The Payment Systems Regulator may direct the relevant participant to pay any expenses incurred by the Payment Systems Regulator in relation to an appointment under subsection (1)(b).

Appointment of persons to conduct investigations

83

(1) If it considers that it is desirable to do so in order to advance any of its payment systems objectives, the Payment Systems Regulator may appoint one or more competent persons to conduct an investigation on its behalf into the nature, conduct or state of the business of any participant in a regulated payment system.

(2) If it appears to the Payment Systems Regulator that there are circumstances suggesting that there may have been a compliance failure, the Payment Systems Regulator may appoint one or more competent persons to conduct an investigation on its behalf.

Investigations: general

84

(1) This section applies if the Payment Systems Regulator appoints one or more competent persons (“investigators”) under section 83 to conduct an investigation on its behalf.

(2) The Payment Systems Regulator must give written notice of the appointment of an investigator to the person who is the subject of the investigation.

(3) Subsections (2) and (9) do not apply if—

(a) the Payment Systems Regulator believes that the notice required by subsection (2) or (9) would be likely to result in the investigation being frustrated, or

(b) the investigator is appointed under subsection (2) of section 83.

(4) A notice under subsection (2) must—

(a) specify the provision under which the investigator was appointed, and

(b) state the reason for the appointment.

(5) Nothing prevents the Payment Systems Regulator from appointing as an investigator—

(a) a member of its staff, or

(b) a member of staff of the FCA.

(6) An investigator who conducts an investigation must make a report of the investigation to the Payment Systems Regulator.

(7) The Payment Systems Regulator may, by a direction to an investigator, control—

(a) the scope of the investigation,

(b) the period during which the investigation is to be conducted,

(d) the reporting of the investigation.

(8) A direction may, in particular—

(a) confine the investigation to particular matters;

(b) extend the investigation to additional matters;

(c) require the investigator to discontinue the investigation or to take only those steps that are specified in the direction;

(d) require the investigator to make such interim reports as are so specified.

(9) If there is a change in the scope or conduct of the investigation and, in the opinion of the Payment Systems Regulator, the person who is the subject of the investigation is likely to be significantly prejudiced by not being made aware of it, that person must be given written notice of the change.

Powers of persons appointed under section 83

85

(1) An investigator may require any person within subsection (2)—

(a) to attend before the investigator at a specified time and place and answer questions, or

(b) otherwise to provide any information which the investigator requires.

(2) The persons referred to in subsection (1) are—

(a) the person who is the subject of the investigation (“the person under investigation”);

(b) any person connected with the person under investigation;

(c) in the case of an investigation into whether there has been a compliance failure, any person who in the investigator's opinion is or may be able to give information which is or may be relevant to the investigation.

(3) An investigator may also require any person to produce at a specified time and place any specified documents or documents of a specified description.

(4) A requirement under subsection (1) or (3) may be imposed only so far as the investigator concerned reasonably considers the question, provision of information or production of the document to be relevant to the purposes of the investigation.

(5) In the case of an investigation into whether there has been a compliance failure, the investigator may also require any person falling within subsection (2)(c) to give the investigator all assistance in connection with the investigation which the person is reasonably able to give.

(6) For the purposes of this section, a person is connected with the person under investigation (“A”) if the person is or has at any relevant time been—

(a) a member of A's group,

(b) a controller of A, or

(7) In this section—

“controller” has the same meaning as in FSMA 2000 (see section 422 of that Act);

“group” has the same meaning as in FSMA 2000 (see section 421 of that Act);

“investigator” means a person conducting an investigation under section 83;

“specified” means specified in a notice in writing.

Information and documents: supplemental provisions

86

(1) In this section “relevant document” means a document produced in response to a requirement imposed under section 81 or 85.

(2) In a case where—

(a) the Payment Systems Regulator has power under section 81, or an investigator has power under section 85, to require a person to produce a document, but

(b) it appears that the document is in the possession of another person,

the power may be exercised in relation to that other person.

(3) Any person to whom a relevant document is produced may—

(a) take copies or extracts from the document, or

(b) require the person producing the document, or any relevant person (see subsection (4)), to provide an explanation of the document.

(4) “Relevant person”, in relation to a person who is required to produce a document, means a person who—

(a) has been or is or is proposed to be a director or controller of that person,

(b) has been or is an auditor of that person,

(d) has been or is an employee of that person.

(5) A relevant document may be retained for so long as the person to whom it is produced considers that it is necessary to retain it (rather than copies of it) for the purposes for which the document was requested.

(6) If the person to whom a relevant document is produced has reasonable grounds for believing—

(a) that the document may have to be produced for the purposes of any legal proceedings, and

(b) that it might otherwise be unavailable for those purposes,

it may be retained until the proceedings are concluded.

(7) If a person who is required under section 81 or 85 to produce a document fails to do so, the Payment Systems Regulator or an investigator may require the person to state, to the best of the person's knowledge and belief, where the document is.

(8) A lawyer may be required under section 81 or 85 or this section to provide the name and address of a client.

(9) A person may not be required under section 81 or 85 or this section to disclose information or produce a document in respect of which the person owes an obligation of confidence as a result of carrying on the business of banking unless—

(a) the person is the person under investigation or a member of that person's group,

(b) the person to whom the obligation of confidence is owed is the person under investigation or a member of that person's group,

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