HM TREASURY News
Release (115/07) issued by The Government News Network on 29 October 2007
Economic Secretary
and City Minister Kitty Ussher today announced that the Financial
Services Authority will be the UK regulator for the provision of
payment services, established by the Payment Services Directive.
Kitty Ussher made the announcement in a speech to Global Consumer
Money Transfers conference. The money transfer sector, along with
other payment service providers, will become subject to regulation
under the Directive, which needs to be implemented in all EU
Member States by November 2009. An EU political agreement was
reached on the Payment Services Directive earlier this year.
The overarching aim of the Payment Services Directive is to
support the Single Market in financial services. Currently,
cross-border competition in payments is hampered by differing
national standards. The Directive creates a harmonised legal
framework for payment services such as direct debits, card
payments, and remittances.
The Directive seeks to improve consumer choice by opening up the
payments market to greater competition. This is supported by the
agreement reached on a new licencing regime for non-bank payment
service providers such as money transfer operators, which will
allow them to operate throughout the EU.
The details of implementing the provisions of the Payment
Services Directive into UK law are now being considered, and the
Treasury will publish a consultation document on implementation
later this year.
Kitty Ussher said:
"We now need to consider how best to implement the Payment
Services Directive in the UK and ensure the regime we create is
proportionate and risk-based. In consulting on our approach to
implementation this autumn we will be looking to support further
competition, choice, efficiency and innovation in the payments
market, and balance this with ensuring appropriate consumer
protection, true to the aims of the Directive."
While the FSA will be the UK regulator for the provision of
payment services under the Payment Services Directive, HMRC will
retain responsibility for supervising the anti-money laundering
requirements on money service businesses, in line with their
enhanced supervisory role set out in the Government's
Financial Crime Strategy.
Kitty Ussher said:
"HMRC are experienced anti-money laundering and counter
terrorist financing supervisors. By retaining supervision of
money service businesses HMRC will provide continuity for the
sector and be able to utilise their enhanced supervisory powers
under the Money Laundering Regulations 2007."
The Money Laundering Regulations 2007, which implement the Third
Money Laundering Directive, come into effect on 15 December of
this year.
NOTES TO EDITORS
1. The full text of Kitty Ussher's speech is available on
the Treasury website at: http://www.hm-treasury.gov.uk.
2. The money transfer industry is worth nearly £150 billion a
year and is growing rapidly. The best estimate is that about £2.3
billion worth of remittances are made each year. There are over
4,000 money service businesses operating out of over 30,000
premises in the UK.
The Payment Services Directive allows non-bank providers such as
money transfer operators to passport their services around the EU
on the basis of a single licence obtained in one Member State.
It introduces: a prudential authorisation regime for passporting
businesses, tiered according to the size of the operator, and
where appropriate, for payment customer funds to be ring-fenced
from other creditors in the event of insolvency new conduct of
business rules for all payment service providers, aimed at
ensuring adequate customer protection. These address the provision
of information to payment service users, and liability
requirements that will provide greater legal certainty for both
payment services users and providers
3. The Directive's objectives to promote competition,
efficiency and innovation in the payments market are balanced with
the aim of ensuring adequate consumer protection. Conduct of
business rules set out in the Directive address the provision of
information to consumers and businesses, and liability
requirements to provide greater legal certainty about how a
payment should be effected.
4. The Money Laundering Regulations, which implement the Third
Money Laundering Directive, come into effect on 15 December are
available from the HMT website.
5. The Financial Crime Strategy was published in February 2007
and is available from the HMT website: http://www.hm-treasury.gov.uk/documents/financial_services/money/fin_money_financialchallenge.cfm
6. Non-media enquiries should be addressed to the Treasury
Correspondence and Enquiry Unit on 020 7270 4558, or by e-mail to public.enquiries@hm-treasury.gov.uk.
7. This press release and other Treasury publications and
information are available on the Treasury website at http://www.hm-treasury.gov.uk.
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