The Government have announced the Financial Services Authority will be the UK regulator for the provision of payment services under the Payment Services Directive.
The Payment Services Directive must be implemented in all EU Member States by November 2009. Bank Law Blogger posted on this last month. The aim of the Payment Services Directive is to support the Single Market in financial services and create a harmonised legal framework for payment services such as direct debits, card payments, and remittances. It opens up the payments market to greater competition and there will be a new licencing regime for non-bank payment service providers such as money transfer operators, which will allow them to operate throughout the EU.
This means that the money transfer sector, along with other payment service providers, will become subject to regulation under the Directive. The sector is already under regulation by HMRC in respect of money laundering law: and in what may prove to be an interesting balancing act, the Government have confirmed HMRC will retain responsibility for supervising the anti-money laundering requirements on money service businesses. They will have enhanced supervisory powers under the Money Laundering Regulations 2007 which implement the Third Money Laundering Directive and come into effect on 15 December of this year.
How the Payment Services Directive will be implemented into UK law is now being considered, and the Treasury will publish a consultation document on implementation later this year.
