Financial Services (Banking Reform) Bill

House of Lords

Session 2013 - 14
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Other Bills before Parliament

Financial Services (Banking Reform) Bill

Financial Services (Banking Reform) Bill
Part 5 — Regulation of payment systems
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(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
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(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,
10
(b)
the Competition and Markets Authority, and
(c)
the FCA.
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The Regulator’s functions under Part 4 of the Enterprise Act 2002
(1)
The functions to which this subsection applies (“the concurrent functions”) are
to be concurrent functions of the Payment Systems Regulator and the
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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
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(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 171 (duty to publish guidance).
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(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,
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(b)
references in that Part to section 5 of that Act are to be read as including
references to section 54 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
35
person.
(5)
But subsection (4) does not apply—
(a)
in relation to section 166 or 171 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
40
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
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Financial Services (Banking Reform) Bill
Part 5 — Regulation of payment systems
51

(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.
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Restrictions on exercise of functions under Part 4 of the Enterprise Act 2002
5
(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.
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(3)
In subsections (1) and (2) “the concurrent functions” has the same meaning as
in section 49.
(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
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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, has the same meaning as
in section 49, and
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(b)
in relation to the FCA, means the functions which by virtue of section
234J of FSMA 2000 are concurrent functions of the FCA and the CMA.
(7)
In this section “the CMA” means the Competition and Markets Authority.
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The Regulator’s functions under the Competition Act 1998
(1)
The functions to which this subsection applies are to be concurrent functions
25
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—
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(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,
(c)
agreements, decisions or concerted practices of the kind mentioned in
Article 101(1) of the Treaty on the Functioning of the European Union,
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and
(d)
conduct which amounts to abuse of the kind mentioned in Article 102
of the Treaty on the Functioning of the European Union.
(3)
But subsection (1) does not apply to functions under the following sections of
that Act—
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section 31D(1) to (6) (duty to publish guidance);

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).

Financial Services (Banking Reform) Bill
Part 5 — Regulation of payment systems
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(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 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), 38(1) to (6), 40B(1) to (4), 51, 52(6)
5
and (8) and 54 of that Act, or
(b)
where the context otherwise requires.
52
Duty to consider exercise of powers under Competition Act 1998
(1)
Before exercising any power within subsection (2), the Payment Systems
Regulator must consider whether it would be more appropriate to proceed
10
under the Competition Act 1998.
(2)
The powers referred to in subsection (1) are—
(a)
its power to give a direction under section 44 (apart from the power to
give a general direction);
(b)
its power to impose a requirement under section 45 (apart from the
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power to impose a requirement on all operators of regulated payment
systems);
(c)
its powers under sections 46, 47 and 48.
(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.
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53
Provision of information and assistance to a CMA group
(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
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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 49.
(3)
“Relevant information”, in relation to a relevant investigation, is information—
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(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
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(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
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Enterprise and Regulatory Reform Act 2013.

Financial Services (Banking Reform) Bill
Part 5 — Regulation of payment systems
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Function of keeping markets under review
(1)
For the purpose of the functions conferred on it by sections 48 to 53 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.
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(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.
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Exclusion of general duties
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(1)
Section 39 (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 49 to 53.
(2)
But in the carrying out of any functions by virtue of sections 49 to 53, the
Payment Systems Regulator may have regard to any of the matters in respect
15
of which a duty is imposed by section 39 if it is a matter to which the
Competition and Markets Authority is entitled to have regard in the carrying
out of those functions.
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Concurrent competition powers: supplementary provision
(1)
If any question arises as to whether, by virtue of section 49 or 51, any functions
20
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
25
Regulator on the ground that it should have been done by or in relation to the
Competition and Markets Authority.
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Amendments relating to Regulator’s competition powers
(1)
In section 9E of the Company Directors Disqualification Act 1986
(interpretation of sections 9A to 9D), in subsection (2), after paragraph (f)
30
insert—
“(g)
the Payment Systems Regulator established under section 31 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—
35
“(i)
the Payment Systems Regulator established under section 31 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—
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“(j)
in relation to the Payment Systems Regulator, section 49
of the Financial Services (Banking Reform) Act 2013.”;

Financial Services (Banking Reform) Bill
Part 5 — Regulation of payment systems
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(b)
in subsection (8), for “or Monitor” substitute “, Monitor or the Payment
Systems Regulator.”;
(c)
at the end insert—
“(10)
In this section “the Payment Systems Regulator” means the
body established under section 31 of the Financial Services
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(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 31 of
10
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 31
15
of the Financial Services (Banking Reform) Act 2013.”
Complaints
58
Complaints by representative bodies
(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
20
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.
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(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
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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
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than one person who supplies or acquires services in the market
concerned, or
(c)
any conduct relating to the market concerned of customers of any
person who supplies or acquires services,

and “conduct” includes any failure to act (whether or not intentional) and any
40
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

Financial Services (Banking Reform) Bill
Part 5 — Regulation of payment systems
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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 58 of the Financial
Services (Banking Reform) Act 2013 (complaints by representative
5
bodies).

“Designated representative body” and “the Payment Systems
Regulator” have the same meaning in this subsection as they have in
that section.”
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Response by Regulator
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(1)
The Payment Systems Regulator must within 90 days after the day on which it
receives a complaint under section 58 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.
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(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.
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60
Complaints: guidance
(1)
The guidance given by the Payment Systems Regulator under section 81—
(a)
must include guidance about the presentation of a reasoned case for a
complaint under section 58, and
(b)
may include guidance about any other matters that appear to the
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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
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61
Meaning of “compliance failure”
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 44, or
(b)
comply with a requirement imposed under section 45 or 46.
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62
Publication of compliance failures etc
(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 63.
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