(3) In this Part “general guidance” means guidance given by the Payment Systems
Regulator under this section which—

(a) is given—

(i) to persons generally,

(ii) 5to participants in payment systems, or regulated payment
systems, generally, or

(iii) to a class of participant in a payment system or regulated
payment system,

(b) is intended to have continuing effect, and

(c) 10is given in writing or other legible form.

(4) The Payment Systems Regulator may give financial or other assistance to
persons giving information or advice of a kind which the Payment Systems
Regulator could give under this section.

(5) The Payment Systems Regulator may—

(a) 15publish its guidance,

(b) offer copies of its published guidance for sale at a reasonable price, and

(c) if it gives guidance in response to a request made by any person, make
a reasonable charge for that guidance.

Reports

82 20Reports

If it considers that it is desirable to do so in order to advance any of its payment
systems objectives, the Payment Systems Regulator may prepare and publish
a report into any matter which it considers relevant to the exercise of its
functions under this Part.

25Relationship with other regulators

83 Duty of regulators to ensure co-ordinated exercise of functions

(1) The following are regulators for the purposes of this section—

(a) the Payment Systems Regulator;

(b) the Bank of England;

(c) 30the FCA;

(d) the PRA.

(2) The regulators must co-ordinate the exercise of their relevant functions (see
subsection (5)) with a view to ensuring—

(a) that each regulator consults every other regulator (where not otherwise
35required to do so) in connection with any proposed exercise of a
relevant function in a way that may have a material adverse effect on
the advancement by that other regulator of any of its objectives;

(b) that where appropriate each regulator obtains information and advice
from every other regulator in connection with the exercise of its
40relevant functions in relation to matters of common regulatory interest
in cases where the other regulator may be expected to have relevant
information or relevant expertise.

(3) The duty in subsection (2) applies only to the extent that compliance with the
duty—

(a) is compatible with the advancement by each regulator of any of its
objectives, and

(b) 5does not impose a burden on the regulators that is disproportionate to
the benefits of compliance.

(4) A function conferred on a regulator relates to matters of common regulatory
interest if—

(a) another regulator exercises similar or related functions in relation to the
10same persons,

(b) another regulator exercises functions which relate to different persons
but relate to similar subject-matter, or

(c) its exercise could affect the advancement by another regulator of any of
its objectives.

(5) 15“Relevant functions” means—

(a) in relation to the Payment Systems Regulator, its functions under this
Part;

(b) in relation to the Bank of England, its functions under Part 5 of the
Banking Act 2009 (inter-bank payment systems);

(c) 20in relation to the FCA, the functions conferred on it by or under FSMA
2000 (see section 1A(6) of that Act);

(d) in relation to the PRA, the functions conferred on it by or under FSMA
2000 (see section 2A(6) of that Act).

(6) “Objectives” means—

(a) 25in relation to the Payment Systems Regulator, its payment systems
objectives;

(b) in relation to the Bank of England, its Financial Stability Objective
under section 2A of the Bank of England Act 1998;

(c) in relation to the FCA, its strategic objective and operational objectives
30under section 1B of FSMA 2000;

(d) in relation to the PRA, its general objective under section 2B of that Act.

84 Memorandum of understanding

(1) The following are regulators for the purposes of this section—

(a) the Payment Systems Regulator;

(b) 35the Bank of England;

(c) the FCA;

(d) the PRA.

(2) The regulators must prepare and maintain a memorandum which describes in
general terms—

(a) 40the role of each regulator in relation to the exercise of relevant functions
which relate to matters of common regulatory interest, and

(b) how the regulators intend to comply with section 83 in relation to the
exercise of such functions.

(3) The regulators must review the memorandum at least once in each calendar
45year.

(4) The regulators must give the Treasury a copy of the memorandum and any
revised memorandum.

(5) The Treasury must lay before Parliament a copy of any document received by
them under this section.

(6) 5The regulators must ensure that the memorandum as currently in force is
published in the way appearing to them to be best calculated to bring it to the
attention of the public.

(7) The memorandum need not relate to any aspect of compliance with section 83
if the regulators consider—

(a) 10that publication of information about that aspect would be against the
public interest, or

(b) that that aspect is a technical or operational matter not affecting the
public.

(8) In this section—

(a) 15the reference in subsection (2)(a) to matters of common regulatory
interest is to be read in accordance with section 83(4), and

(b) references to relevant functions are to be read in accordance with
section 83(5).

85 Power of Bank to require Regulator to refrain from specified action

(1) 20Where the first, second and third conditions are met, the Bank of England may
give a direction under this section to the Payment Systems Regulator.

(2) The first condition is that the Payment Systems Regulator is proposing to
exercise any of its powers under this Part in relation to a participant in a
regulated payment system.

(3) 25The second condition is that the Bank of England is of the opinion that the
exercise of the power in the manner proposed may—

(a) threaten the stability of the UK financial system,

(b) have serious consequences for business or other interests in the United
Kingdom, or

(c) 30have an adverse effect on the Bank’s ability to act in its capacity as a
monetary authority.

(4) The third condition is that the Bank of England is of the opinion that the giving
of the direction is necessary in order to avoid the possible consequence falling
within subsection (3).

(5) 35A direction under this section is a direction requiring the Payment Systems
Regulator not to exercise the power or not to exercise it in a specified manner.

(6) The direction may be expressed to have effect during a specified period or until
revoked.

(7) The Payment Systems Regulator is not required to comply with a direction
40under this section if or to the extent that in the opinion of the Payment Systems
Regulator compliance would be incompatible with any EU obligation or any
other international obligation of the United Kingdom.

86 Power of FCA to require Regulator to refrain from specified action

(1) Where the first, second and third conditions are met, the FCA may give a
direction under this section to the Payment Systems Regulator.

(2) The first condition is that the Payment Systems Regulator is proposing to
5exercise any of its powers under this Part in relation to a participant in a
regulated payment system.

(3) The second condition is that the FCA is of the opinion that the exercise of the
power in the manner proposed may have an adverse effect on the ability of the
FCA to comply with its duty under section 1B(1) of FSMA 2000 (FCA’s general
10duties).

(4) The third condition is that the FCA is of the opinion that the giving of the
direction is necessary in order to avoid the possible consequence falling within
subsection (3).

(5) A direction under this section is a direction requiring the Payment Systems
15Regulator not to exercise the power or not to exercise it in a specified manner.

(6) The direction may be expressed to have effect during a specified period or until
revoked.

(7) The Payment Systems Regulator is not required to comply with a direction
under this section if or to the extent that in the opinion of the Payment Systems
20Regulator compliance would be incompatible with any EU obligation or any
other international obligation of the United Kingdom.

87 Power of PRA to require Regulator to refrain from specified action

(1) Where the first, second and third conditions are met, the PRA may give a
direction under this section to the Payment Systems Regulator.

(2) 25The first condition is that the Payment Systems Regulator is proposing to
exercise any of its powers under this Part in relation to—

(a) a class of PRA-authorised persons, or

(b) a particular PRA-authorised person.

(3) The second condition is that the PRA is of the opinion that the exercise of the
30power in the manner proposed may—

(a) threaten the stability of the UK financial system,

(b) result in the failure of a PRA-authorised person in a way that would
have an adverse effect on the stability of the UK financial system, or

(c) have an adverse effect on the ability of the PRA to comply with its duty
35under section 2B(1) of FSMA 2000 (the PRA’s general objective).

(4) The third condition is that the PRA is of the opinion that the giving of the
direction is necessary in order to avoid the possible consequence falling within
subsection (3).

(5) A direction under this section is a direction requiring the Payment Systems
40Regulator not to exercise the power or not to exercise it in a specified manner.

(6) The direction may be expressed to have effect during a specified period or until
revoked.

(7) The Payment Systems Regulator is not required to comply with a direction
under this section if or to the extent that in the opinion of the Payment Systems
Regulator compliance would be incompatible with any EU obligation or any
other international obligation of the United Kingdom.

(8) 5The reference in subsection (3)(b) to the “failure” of a PRA-authorised person
is to be read in accordance with section 2J(3) and (4) of FSMA 2000.

(9) In this section “PRA-authorised person” has the same meaning as in FSMA
2000 (see section 2B(5) of that Act).

Consultation, accountability and oversight

88 10Regulator’s general duty to consult

(1) The Payment Systems Regulator must make and maintain effective
arrangements for consulting relevant persons on—

(a) the extent to which its general policies and practices are consistent with
its general duties under section 39, and

(b) 15how its payment systems objectives may best be achieved.

(2) The following are “relevant persons” for the purposes of this section—

(a) participants in regulated payment systems, and

(b) those who use, or are likely to use, services provided by regulated
payment systems.

(3) 20Arrangements under this section must include the establishment and
maintenance of one or more panels of persons to represent the interests of
relevant persons.

(4) Where the Payment Systems Regulator establishes a panel under subsection
(3), it must appoint one of the members of the panel to be its chair.

(5) 25The Treasury’s approval is required for the appointment or dismissal of the
chair of a panel established under subsection (3).

(6) The Payment Systems Regulator must—

(a) consider representations that are made to it in accordance with
arrangements made under this section, and

(b) 30from time to time publish, in such manner as it thinks fit, responses to
the representations.

89 Consultation in relation to generally applicable requirements

(1) In this section references to imposing a generally applicable requirement are
to—

(a) 35giving a general direction, or

(b) imposing a requirement under section 45 that applies to all operators of
regulated payment systems,

and references to the requirement are to be read accordingly.

(2) Before imposing a generally applicable requirement, the Payment Systems
40Regulator must—

(a) consult the Bank of England, the FCA and the PRA, and

(b) after doing so, publish a draft of the proposed requirement in the way
appearing to the Payment Systems Regulator to be best calculated to
bring it to the attention of the public.

(3) The draft must be accompanied by—

(a) 5a cost benefit analysis,

(b) an explanation of the purpose of the proposed requirement,

(c) an explanation of the Payment Systems Regulator’s reasons for
believing that imposing the requirement is compatible with its duties
under section 39, and

(d) 10notice that representations about the proposed requirement may be
made to the Payment Systems Regulator within a specified time.

(4) Before imposing the proposed requirement the Payment Systems Regulator
must have regard to any representations made to it in accordance with
subsection (3)(d).

(5) 15If the Payment Systems Regulator proposes to impose the requirement, it must
publish an account, in general terms, of—

(a) the representations made to it in accordance with subsection (3)(d), and

(b) its response to them.

(6) If the requirement differs from the draft published under subsection (2)(b) in a
20way which is, in the opinion of the Payment Systems Regulator, significant the
Payment Systems Regulator must (in addition to complying with subsection
(5)) publish details of the difference together with a cost benefit analysis.

(7) For the purposes of this section a “cost benefit analysis” is—

(a) an analysis of the costs together with an analysis of the benefits that will
25arise—

(i) if the proposed requirement is imposed, or

(ii) if subsection (6) applies, from the requirement imposed, and

(b) subject to subsection (8), an estimate of those costs and of those benefits.

(8) If, in the opinion of the Payment Systems Regulator—

(a) 30the costs or benefits referred to in subsection (7) cannot reasonably be
estimated, or

(b) it is not reasonably practicable to produce an estimate,

the cost benefit analysis need not estimate them, but must include a statement
of the Payment Systems Regulator’s opinion and an explanation of it.

(9) 35The Payment Systems Regulator may charge a reasonable fee for providing a
person with a copy of a draft published under subsection (2)(b).

(10) Subsections (2)(b) and (3) to (6) do not apply if the Payment Systems Regulator
considers that the delay involved in complying with them would be prejudicial
to the interests of those who use, or are likely to use, services provided by
40regulated payment systems.

(11) Subsections (3)(a) and (6) do not apply if the Payment Systems Regulator
considers that, making the appropriate comparison—

(a) there will be no increase in costs, or

(b) there will be an increase in costs but the increase will be of minimal
45significance.

(12) In subsection (11) the “appropriate comparison” means—

(a) in relation to subsection (3)(a), a comparison between the overall
position if the requirement is imposed and the overall position if it is
not imposed;

(b) in relation to subsection (6), a comparison between the overall position
5after the imposing of the requirement and the overall position before it
was imposed.

90 Independent inquiries

(1) Section 68 of the Financial Services Act 2012 (cases in which Treasury may
arrange independent inquiries) is amended as follows.

(2) 10In subsection (1), for “two” substitute “three”.

(3) After subsection (3) insert—

“(3A) The third case is where it appears to the Treasury that—

(a) events have occurred in relation to a regulated payment system
which caused or risked causing significant damage to business
15or other interests throughout the United Kingdom, and

(b) those events might not have occurred, or the threat or damage
might have been reduced, but for a serious failure in—

(i) the system established by Part 5 of the Financial Services
(Banking Reform) Act 2013 for the regulation of
20payment systems, or

(ii) the operation of that system.”

(4) In section 83(1) (interpretation), after the definition of “regulated activity”
insert—

• ““regulated payment system” has the same meaning as in Part 5 of
  25the Financial Services (Banking Reform) Act 2013 (see section 95
  of that Act);”.

91 Investigations into regulatory failure

(1) Part 5 of the Financial Services Act 2012 (inquiries and investigations) is
amended as follows.

(2) 30After section 76 insert—

“76A Duty of Payment Systems Regulator to investigate and report on
possible regulatory failure

(1) Subsection (3) applies where it appears to the Payment Systems
Regulator that—

(a) 35events have occurred in relation to a regulated payment system
which had or could have had a significant adverse effect on
effective competition in the interests of—

(i) participants in the payment system, or

(ii) those who use, or are likely to use, the services provided
40by the payment system, and

(b) those events might not have occurred, or the adverse effect
might have been reduced, but for a serious failure in—

(i) the system established by Part 5 of the Financial Services
(Banking Reform) Act 2013 for the regulation of
payment systems, or

(ii) the operation of that system.

(2) 5Subsection (3) also applies where the Treasury direct the Payment
Systems Regulator that it appears to the Treasury that the conditions in
subsection (1) are met in relation to specified events.

(3) The Payment Systems Regulator must carry out an investigation into
the events and the circumstances surrounding them and report to the
10Treasury on the result of the investigation.

(4) Subsection (3) does not apply by virtue of subsection (1) if the Treasury
direct the Payment Systems Regulator that it is not required to carry out
an investigation into the events concerned.

(5) In this section “participant”, in relation to a regulated payment system,
15has the same meaning as in Part 5 of the Financial Services (Banking
Reform) Act 2013 (see section 33 of that Act).”

(5) In section 77 (power of Treasury to require FCA or PRA to undertake
investigation)—

(a) in subsection (1)(a), for “either regulator” substitute “a regulator”;

(b) 20in subsection (3), omit the “or” at the end of paragraph (b) and after
paragraph (c) insert “, or

(d) a regulated payment system.”;

(c) the heading of that section becomes “Power of Treasury to require
regulator to undertake investigation”.

(6) 25In section 78 (conduct of investigation), in subsection (1), for “or 74” substitute
“, 74 or 76A”.

(7) In section 79 (conclusion of investigation), for “or 74” substitute “, 74 or 76A”.

(8) In section 80 (statements of policy), in subsection (1)(a), for “or 74” substitute “,
74 or 76A”.

(9) 30In section 81 (publication of directions), in subsection (1), after paragraph (b)
insert—

“(ba) section 76A(4);”.

(10) In section 83(1) (interpretation)—

(a) after the definition of “listed securities” insert—

• 35““the Payment Systems Regulator” means the body
  established under section 31 of the Financial Services
  (Banking Reform) Act 2013;”;

(b) in the definition of “regulator”, for “or the PRA” substitute “, the PRA
or the Payment Systems Regulator”.

92 40Competition scrutiny

(1) Chapter 4 of Part 9A of FSMA 2000 (competition scrutiny) applies to the
Payment Systems Regulator’s practices and regulating provisions in relation to
payment systems as it applies to the FCA’s practices and regulating provisions
within the meaning of that Chapter.

(2) In subsection (1)—

(a) the reference to the Payment Systems Regulator’s practices in relation
to payment systems is a reference to practices adopted by it in the
exercise of functions under this Part, and

(b) 5the reference to the Payment Systems Regulator’s regulating provisions
in relation to payment systems is a reference to the following—

(i) any general directions given under section 44;

(ii) any requirements imposed under section 45 on all operators of
regulated payment systems;

(iii) 10any guidance given under section 81.

Miscellaneous and supplemental

93 Relationship with Part 8 of the Payment Services Regulations 2009

(1) The Payment Systems Regulator may not exercise any power under this Part
for the purposes of enabling a relevant person to obtain access to, or otherwise
15participate in, a payment system if the payment system is one to which Part 8
of the Payment Services Regulations 2009 (S.I. 2009/209S.I. 2009/209) does not apply.

(2) A person is a “relevant person” for the purposes of subsection (1) if regulation
97 of the Payment Services Regulations 2009 (prohibition on restrictive rules on
access to payment systems) applies in relation to access to, or participation in,
20a payment system by the person.

94 Exemption from liability in damages for FCA and PRA

(1) In paragraph 25 of Schedule 1ZA to FSMA 2000 (FCA’s exemption from
liability in damages), after sub-paragraph (1) insert—

“(1A) In sub-paragraph (1) the reference to the FCA’s functions includes its
25functions under Part 5 of the Financial Services (Banking Reform)
Act 2013 (regulation of payment systems).”

(2) In paragraph 33 of Schedule 1ZB to FSMA 2000 (PRA’s exemption from
liability in damages), after sub-paragraph (1) insert—

“(1A) In sub-paragraph (1) the reference to the PRA’s functions includes its
30functions under Part 5 of the Financial Services (Banking Reform)
Act 2013 (regulation of payment systems).”

(3) For provision conferring immunity from liability in damages on the Bank of
England in respect of its functions, see section 244 of the Banking Act 2009.

95 Interpretation of Part

(1) 35In this Part—

• “compliance failure” has the meaning given by section 61;

• “designation order” has the meaning given by section 34;

• “direct access”, in relation to a payment system, is to be read in accordance
  with section 33(6);

• 40“document” includes information recorded in any form and, in relation to
  information recorded otherwise than in legible form, references to its
  production include references to producing a copy of the information

  Financial Services (Banking Reform) BillPage 79

  in legible form or in a form from which it can readily be produced in
  visible and legible form;

• “general direction” has the meaning given by section 44(5);

• “general guidance” has the meaning given by section 81(3);

• 5“infrastructure provider”, in relation to a payment system, has the
  meaning given by section 33(4);

• “operator”, in relation to a payment system, has the meaning given by
  section 33(3);

• “participant”, in relation to a payment system, has the meaning given by
  10section 33 (and references to participation in a payment system are to
  be read in accordance with that section);

• “payment service provider”, in relation to a payment system, has the
  meaning given by section 33(5);

• “payment system” has the meaning given by section 32;

• 15“recognised inter-bank payment system” means an inter-bank payment
  system (within the meaning of Part 5 of the Banking Act 2009) specified
  as a recognised system for the purposes of that Part;

• “regulated payment system” means a payment system designated as a
  regulated payment system by a designation order;

• 20“the UK financial system” has the meaning given by section 1I of FSMA
  2000.

(2) References in this Part to the Payment Systems Regulator’s payment systems
objectives are to be read in accordance with section 39(2).

(3) References in this Part to the Bank of England’s capacity as a monetary
25authority are to be read in accordance with section 244 of the Banking Act 2009.

Part 6 Special administration for operators of certain infrastructure systems

Introductory

96 Financial market infrastructure administration

30This Part—

(a) provides for a procedure to be known as FMI administration, and

(b) restricts the powers of persons other than the Bank of England in
relation to the insolvency of infrastructure companies.

97 Interpretation: infrastructure companies

(1) 35In this Part “infrastructure company” has the meaning given by this section.

(2) “Infrastructure company” means a company which is—

(a) the operator of a recognised inter-bank payment system, other than an
operator excluded by subsection (3),

(b) approved under regulations under section 785 of the Companies Act
402006 (provision enabling procedures for evidencing and transferring
title) as the operator of a securities settlement system, or

(c) a company designated by the Treasury under subsection (4).