Financial Services (Banking Reform) Bill (HL Bill 54)

agreement with the applicant to enable the applicant to become a payment
service provider in relation to the system.

(4) An order under this section may provide for the applicant to become a
payment service provider in relation to a payment system—

(a) 5for a period specified in the order;

(b) on terms and conditions specified in the order.

47 Variation of agreements relating to payment systems

(1) This section applies to the following agreements—

(a) any agreement made between the operator of a regulated payment
10system and a payment service provider;

(b) any agreement made between a payment service provider with direct
access to a regulated payment system and another person for the
purpose of enabling that other person to become a payment service
provider in relation to the system;

(c) 15any agreement concerning fees or charges payable in connection
with—

(i) participation in a regulated payment system, or

(ii) the use of services provided by a regulated payment system.

(2) The Payment Systems Regulator may, on the application of a party to an
20agreement to which this section applies, vary the agreement by—

(a) varying any of the fees or charges payable under the agreement, or

(b) in the case of an agreement within subsection (1)(a) or (b), varying any
other terms and conditions relating to the payment service provider’s
participation in the payment system.

(3) 25In the case of an agreement within subsection (1)(b), the reference in subsection
(2)(b) to the payment service provider is to the payment service provider which
does not have direct access to the payment system.

(4) The power under this section to vary any fee or charge includes power to
specify a maximum fee or charge.

(5) 30If the Payment Systems Regulator varies an agreement under this section, the
agreement has effect subject to the variation.

48 Power to require disposal of interest in payment system

(1) The Payment Systems Regulator may require a person who has an interest in
the operator of a regulated payment system to dispose of all or part of that
35interest.

(2) The power conferred by subsection (1) may be exercised only if the Payment
Systems Regulator is satisfied that, if the power is not exercised, there is likely
to be a restriction or distortion of competition in—

(a) the market for payment systems, or

(b) 40a market for services provided by payment systems.

(3) The Payment Systems Regulator may not exercise the power conferred by
subsection (1) without the consent of the Treasury.

(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
5authorities (see subsection (5)), and

(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) 10the Secretary of State,

(b) the Competition and Markets Authority, and

(c) the FCA.

49 The Regulator’s functions under Part 4 of the Enterprise Act 2002

(1) The functions to which this subsection applies (“the concurrent functions”) are
15to be concurrent functions of the Payment Systems Regulator and the
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
20the Enterprise and Regulatory Reform Act 2013), and

(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—

(none) section 166 (duty to maintain register of undertakings and orders);

(none) 25section 171 (duty to publish guidance).

(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
30as including references to the Payment Systems Regulator,

(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
35by payment systems in the course of a business carried on by the
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) 40Section 130A of the Enterprise Act 2002 is to have effect in relation to the
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
45systems used to provide services in the United Kingdom, and

(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.

50 5Restrictions on exercise of functions under Part 4 of the Enterprise Act 2002

(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
10been exercised in relation to that matter by the other.

(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) 15Neither the FCA 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.

(6) In subsections (4) and (5) “the concurrent functions”—

(a) in relation to the Payment Systems Regulator, has the same meaning as
20in section 49, and

(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.

51 The Regulator’s functions under the Competition Act 1998

(1) 25The functions to which this subsection applies are to be concurrent functions
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
30relate to participation in payment systems—

(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
35Article 101(1) of the Treaty on the Functioning of the European Union,
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
40that Act—

(none) section 31D(1) to (6) (duty to publish guidance);

(none) section 38(1) to (6) (duty to publish guidance about penalties);

(none) section 40B(1) to (4) (duty to publish statement of policy on penalties);

(none) section 51 (rules).

(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) 5in relation to sections 31D(1) to (6), 38(1) to (6), 40B(1) to (4), 51, 52(6)
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
10Regulator must consider whether it would be more appropriate to proceed
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) 15its power to impose a requirement under section 45 (apart from the
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
20that it would be more appropriate to proceed under the Competition Act 1998.

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) 25any other assistance which the CMA group may reasonably require in
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) 30“Relevant information”, in relation to a relevant investigation, is information—

(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
35investigation, or

(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) 40In this section “CMA group” has the same meaning as in Schedule 4 to the
Enterprise and Regulatory Reform Act 2013.

54 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) 5the markets for services provided by payment systems.

(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.

55 10Exclusion of general duties

(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
15Payment Systems Regulator may have regard to any of the matters in respect
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.

56 Concurrent competition powers: supplementary provision

(1) 20If any question arises as to whether, by virtue of section 49 or 51, any functions
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
25or Part 4 of the Enterprise Act 2002 by or in relation to the Payment Systems
Regulator on the ground that it should have been done by or in relation to the
Competition and Markets Authority.

57 Amendments relating to Regulator’s competition powers

(1) In section 9E of the Company Directors Disqualification Act 1986
30(interpretation of sections 9A to 9D), in subsection (2), after paragraph (f)
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
35the “and” at the end of paragraph (g) and after paragraph (h) insert—

“(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) 40in subsection (7), at the end insert—

“(j) in relation to the Payment Systems Regulator, section 49
of the Financial Services (Banking Reform) Act 2013.”;

(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
5body established under section 31 of the Financial Services
(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) 10the Payment Systems Regulator established under section 31 of
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) 15the Payment Systems Regulator established under section 31
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
20Systems Regulator that a feature, or combination of features, of a market in the
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
25by order.

(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
30time vary) criteria to be applied by them in determining whether to
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) 35any conduct (whether or not in the market concerned) of one or more
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,

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

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
5Services (Banking Reform) Act 2013 (complaints by representative
bodies).

“Designated representative body” and “the Payment Systems
Regulator” have the same meaning in this subsection as they have in
that section.

10“Designated representative body” and “the Payment Systems
Regulator” have the same meaning in this subsection as they have in
that section.”

59 Response by Regulator

(1) The Payment Systems Regulator must within 90 days after the day on which it
15receives 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.

(2) The response must—

(a) 20include 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.

60 Complaints: guidance

(1) 25The 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
Payment Systems Regulator to be appropriate for the purposes of that
30section.

(2) Guidance given in accordance with subsection (1) is to be treated as general
guidance for the purposes of this Part.

Enforcement and appeals

61 Meaning of “compliance failure”

35In 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.

62 Publication of compliance failures etc

(1) 40The 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.

63 Penalties

(1) The Payment Systems Regulator may require a participant in a regulated
payment system to pay a penalty in respect of a compliance failure.

(2) A penalty—

(a) 5must be paid to the Payment Systems Regulator, and

(b) may be enforced by the Payment Systems Regulator as a debt.

(3) The Payment Systems Regulator must prepare a statement of the principles
which it will apply in determining—

(a) whether to impose a penalty, and

(b) 10the amount of a penalty.

(4) The Payment Systems Regulator must—

(a) publish the statement on its website,

(b) send a copy to the Treasury,

(c) review the statement from time to time and revise it if necessary (and
15paragraphs (a) and (b) apply to a revision), and

(d) in applying the statement to a compliance failure, apply the version in
force when the compliance failure occurred.

64 Warning notices

(1) Before imposing a sanction on any person the Payment Systems Regulator
20must—

(a) give the person a notice in writing (a “warning notice”),

(b) give the person at least 21 days to make representations,

(c) consider any representations made, and

(d) as soon as is reasonably practicable, give the person a notice in writing
25stating whether or not it intends to impose the sanction.

(2) In subsection (1) any reference to imposing a sanction is a reference to—

(a) publishing details under section 62(1), or

(b) requiring the payment of a penalty under section 63.

65 Injunctions

(1) 30If, on the application of the Payment Systems Regulator, the court is satisfied—

(a) that there is a reasonable likelihood that there will be a compliance
failure, or

(b) that there has been a compliance failure and there is a reasonable
likelihood that it will continue or be repeated,

35the court may make an order restraining the conduct constituting the failure.

(2) If, on the application of the Payment Systems Regulator, the court is satisfied—

(a) that there has been a compliance failure by a participant in a regulated
payment system, and

(b) that there are steps which could be taken for remedying the failure,

40the court may make an order requiring the participant, and anyone else who
appears to have been knowingly concerned in the failure, to take such steps as
the court may direct to remedy it.

(3) If, on the application of the Payment Systems Regulator, the court is satisfied—

(a) that there may have been a compliance failure by a participant in a
regulated payment system, or

(b) that a person may have been knowingly concerned in a compliance
failure,

5the court may make an order restraining the participant or the person (as the
case may be) from dealing with any assets which it is satisfied the participant
or person is reasonably likely to deal with.

(4) The jurisdiction conferred by this section is exercisable—

(a) in England and Wales and Northern Ireland, by the High Court, and

(b) 10in Scotland, by the Court of Session.

(5) In this section—

(a) references to an order restraining anything are, in Scotland, to be read
as references to an interdict prohibiting that thing,

(b) references to remedying a failure include mitigating its effect, and

(c) 15references to dealing with assets include disposing of them.

66 Appeals: general

(1) A person who is affected by any of the following decisions of the Payment
Systems Regulator may appeal against the decision—

(a) a decision to give a direction under section 44 (other than a general
20direction),

(b) a decision to impose a requirement under section 45 (other than a
requirement imposed on all operators of regulated payment systems),

(c) a decision to exercise its power under section 46, 47 or 48,

(d) a decision to impose a sanction.

(2) 25In subsection (1) the reference to imposing a sanction is a reference to—

(a) publishing details under section 62(1), or

(b) requiring the payment of a penalty under section 63.

(3) If the decision is a CAT-appealable decision, the appeal must be made to the
Competition Appeal Tribunal in accordance with section 67.

(4) 30A “CAT-appealable decision” means—

(a) a decision to give a direction under section 44,

(b) a decision to impose a requirement under section 45, or

(c) a decision to publish details under section 62(1).

(5) If the decision is a decision to impose a penalty on the person under section 63,
35the appeal must be made to the Competition Appeal Tribunal in accordance
with section 68.

(6) If the decision is a CMA-appealable decision, the appeal must be made to the
Competition and Markets Authority (“the CMA”) in accordance with section
69.

(7) 40A “CMA-appealable decision” means—

(a) a decision to impose a requirement under section 46,

(b) a decision to vary an agreement under section 47, or

(c) a decision to impose a requirement under section 48.

(8) The permission of the CMA is required for an appeal to be made in accordance
with section 69.

(9) The CMA may refuse permission for an appeal only if—

(a) the appeal is made for reasons that are trivial or vexatious, or

(b) 5the appeal has no reasonable prospect of success.

67 Appeals to Competition Appeal Tribunal

(1) This section applies where a person is appealing to the Competition Appeal
Tribunal (“the Tribunal”) against a CAT-appealable decision.

(2) The means of making an appeal is by sending the Tribunal a notice of appeal
10in accordance with Tribunal rules.

(3) The notice of appeal must be sent within the period specified, in relation to the
decision appealed against, in those rules.

(4) In determining an appeal made in accordance with this section, the Tribunal
must apply the same principles as would be applied by a court on an
15application for judicial review.

(5) The Tribunal must either—

(a) dismiss the appeal, or

(b) quash the whole or part of the decision to which the appeal relates.

(6) If the Tribunal quashes the whole or part of a decision, it may refer the matter
20back to the Payment Systems Regulator with a direction to reconsider and
make a new decision in accordance with its ruling.

(7) The Tribunal may not direct the Payment Systems Regulator to take any action
which it would not otherwise have the power to take in relation to the decision.

(8) The effect of a decision to publish details under section 62(1) is suspended by
25the making of an appeal against the decision (and the details may not be
published until the appeal has been determined).

(9) The effect of any other CAT-appealable decision is not suspended by the
making of an appeal against the decision.

(10) In this section and section 68 “Tribunal rules” means rules under section 15 of
30the Enterprise Act 2002.

68 Appeals in relation to penalties

(1) This section applies where a person is appealing to the Competition Appeal
Tribunal (“the Tribunal”) against a decision to impose a penalty under section
63.

(2) 35The person may appeal against—

(a) the imposition of the penalty,

(b) the amount of the penalty, or

(c) any date by which the penalty, or any part of it, is required to be paid.

(3) The means of making an appeal is by sending the Tribunal a notice of appeal
40in accordance with Tribunal rules.