On 9 December 2021, the Payment Systems Regulator (PSR) published Policy Statement 21/3 ‘Regulatory framework for the New Payments Architecture central infrastructure services’ (PS21/3).
In PS21/3 the PSR sets out the regulatory framework it will implement to address risks to competition and innovation arising from the behaviour of a provider of central infrastructure services (CIS) for the New Payments Architecture (NPA). The NPA is the payment industry’s proposed way of organising the clearing and settlement of most interbank payments in the future, including those that currently use Bacs and Faster Payments. Pay.UK, the operator of Bacs and Faster Payments, is responsible for delivering the NPA. This includes procuring a provider of NPA CIS. Pay.UK is also responsible for the design of the NPA. In PS21/3 the PSR sets out the requirements on Pay.UK and the CIS provider.
In terms of the requirements on Pay.UK these can be summarised as:
- Be the primary interface and decision-maker for CIS provision.
- Set CIS user prices, and do so using a methodology that has regard to certain pricing principles and is subject to the PSR’s non-objection.
- Set the rules and standards for NPA CIS, and ensure that these facilitate competition and innovation.
- Ensure that CIS facilitate innovation and competition.
- Ensure that a CIS provider does not use or disclose to any other party, including its affiliates, information and data for anything other than CIS provision.
- In a timely manner, make available to the market, information and data concerning the provision of CIS that would help facilitate competition or innovation.
The PSR plans to give directions to implement its regulatory framework before the NPA goes live using its powers under the Financial Services (Banking Reform) Act 2013.