Europe: EBA consults on proposed guidelines on limited network exclusion under PSD2
On 15 July 2021, the EBA published a consultation paper (EBA/CP/2021/28) proposing guidelines on the limited network exclusion (LNE) under PSD2.
The EBA explains that Article 3(k) of PSD2 introduced an exclusion for services based on specific payment instruments that can be used only in a limited way. It believes that the implementation and application of the LNE requirements diverges significantly between member states, which impedes the single market for payment services in the EU and creates opportunities for regulatory arbitrage. The EBA also believes that consumers are sometimes unaware that they do not benefit from the protection envisaged under PSD2.
Surveys and Reports
Regulatory Developments
United Kingdom: Financial Services Act 2021 becomes law
On 29 April 2021, the Financial Services Bill 2019-21 received Royal Assent. In a press release, HM Treasury described the Financial Services Act 2021 (the Act) as a ‘major milestone in shaping a regulatory framework for UK financial services outside of the EU.’ The Act makes significant amendments to key legislation, including the Financial Services and Markets Act 2000 (FSMA) and onshored EU financial services regulation.
Sections of particular relevance include the following:
Section 29 requires the FCA to consult on whether it should make rules providing that authorised persons owe a duty of care to consumers. The consultation was launched on 14 May 2021 (see the separate item below). The FCA must publish the results of its analysis before 1 January 2022 and make final rules by 1 August 2022;
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UK strives to “be a leader in AI technology” as it sets out its next steps for the regulation of artificial intelligence.
On 23 March 2021, the UK Intellectual Property Office (IPO) published the outcome of its consultation last year on artificial intelligence (AI) and intellectual property (IP) (the Response). The Response highlights the UK’s ambition to “be a leader in AI technology” by developing and adapting IP legislation in light of developments in AI technology, notwithstanding the fact that such developments may, post-Brexit, result in a divergence between the approach taken in the UK and the EU.
Recent regulatory developments of interest to most financial institutions.
Contents
Tackling financial exclusion: House of Lords Liaison Committee follow-up report
Safe harbour provisions to support the wind-down of critical benchmarks: RFRWG letter
Net zero and the future of green finance: Treasury Committee report
UK Future Regulatory Framework Review: BoE speech on PRA policymaking
UK MiFID research and best execution reporting requirements: FCA CP21/9
Strengthening financial promotion rules for high-risk investments and firms approving financial promotions: FCA DP21/1
Compliance, culture and evolving regulatory expectations: FCA speech
Improving effective regulation: FCA speech
Why black inclusion matters: FCA speech
Climate change and sustainable finance: FCA webpage
Consumer champion Martin Lewis said scammers may use similar language to legitimate bodies (Steve Parsons/PA)
“That is making improving financial inclusion far more difficult when people who have already been burnt by scammers using similar language won’t trust official bodies.
“It needs to be put in the Online Harms Bill, there is no plan for that to happen, if that doesn’t happen I am extremely worried how we will ever have financial leadership in this sector again when there are so many scammers purporting to offer it.”
Fraudsters have used the coronavirus crisis to prey on people over the past year, with offers of fake refunds, fake investments and fake offers of masks and hand sanitisers. They will often make their websites appear to belong to legitimate and well-known brands.