On September 5, 2018, the UK government proposed amendments to the UK Payment Services Regulations 2017 (PSRs), the UK Electronic Money Regulations 2011 (EMRs) and the EU Single Euro Payments Area (SEPA) Regulation (260/2012) (the SEPA Regulation) as it will be incorporated into UK domestic law when the UK leaves the EU (Brexit). The PSRs and the EMRs transpose the revised EU Payment Services Directive (2015/2366) (PSD2) and the revised EU Electronic Money Directive (2009/110) into domestic law in the UK. In contrast, as an EU regulation, the SEPA Regulation currently has direct effect in the UK.
The proposed amendments will be made under two statutory instruments pursuant to the UK European Union (Withdrawal) Act 20181 and will take effect on March 29, 2019, when the UK leaves the EU. One of the relevant statutory instruments also provides for temporary permissions regimes to enable payment institutions (PIs) and electronic money institutions (EMIs) incorporated in other member states of the European Economic Area (EEA) to continue to provide regulated services in the UK post Brexit in the event the UK and EU do not agree and ratify a withdrawal agreement with transitional arrangements before Brexit. EEA banks that provide regulated services in the UK will be able to use a separate temporary permissions regime under the UK Financial Services and Markets Act 2000.
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