FSA proposes Payment Services Directive handbook changes

The FSA has issued a consultation paper proposing amendments to its handbook to comply with the EU Payment Services Directive

LONDON – Regulatory changes brought about by the European Union’s (EU) new Payment Services Directive (PSD) have prompted the Financial Services Authority to produce a consultation paper proposing changes to the UK regulator’s handbook.

The directive – currently under Treasury review and slated for implementation by November 1, 2009 – will regulate payment services across the European Economic Area (EEA). Changes will affect card payments, direct debits and money transfers. All banks, building societies, e-money issuers, money transfer firms and credit card issuers across the region must comply with the new regime.

“We are working closely with HM Treasury on implementation of the directive,” says Graeme Ashley-Fenn, director of permissions, decisions and reporting at the FSA. “Our proposals are a small but important step in the wider PSD project, and aim to make the transition for firms, some of which will be new to FSA regulation, and consumers as smooth as possible.”

The FSA’s proposed amendments concern complaints handling, the jurisdiction of the Financial Ombudsman Service to allow it to perform a new out-of-court redress function, and an enforcement policy for the PSD that mirrors the regulator’s enforcement approach under the Financial Services and Markets Act of 2000.