PSD2 Approval Process for Existing Payment and E-Money Institutions
The Central Bank of Ireland has followed through on its recent promise to contact existing Irish authorised payment and e-money institutions on its process for assessing their compliance with the requirements set out in the revised Payment Service Directive (“PSD2”).
Authorisation requirements for payment institutions (and conduct of business rules for payment service providers )are currently set out in the European Communities (Payment Services) Regulations 2009, which transpose the Payment Services Directive 2007/64 (“PSD”) into Irish law. As set out in our earlier briefing (here), PSD has been substantially revised by PSD2, which must be transposed into Irish law by 13 January 2018. PSD2 also amends the E-money Directive 2009/110, which were transposed into Irish law by the European Communities (Electronic Money) Regulations 2011.
Existing payment and e-money institutions (“Existing Firms”) can continue operating under their existing authorisations for the moment. However, the Central Bank of Ireland must assess whether they comply with PSD2 by 13 July 2018, and if not, which measures the relevant firms need to take to ensure compliance or whether a withdrawal of authorisation is appropriate.
The Central Bank recently published draft PSD2 application forms and guidance and, when doing so, indicated that it would contact Existing Firms separately (see our earlier briefing here). The Central Bank has now contacted Existing Firms setting out the information that it will require to carry out its assessment for PSD2 compliance in the form of an amended version of the draft PSD2 application forms. While in some respects the amended version takes into account the fact that Existing Firms are already authorised, in others, the requirements set out are akin to those for a new authorisation application.
According to the Central Bank, an Existing Firm should return the assessment information to the Central Bank as soon as practicable and in sufficient time to allow it to complete its assessment and provide its decision by 13 July 2018.
We expect that many Existing Firms will have completed their PSD2 gap analysis in anticipation of PSD2’s imminent entry into force. Nevertheless, the PSD2 re-authorisation process is likely to prove challenging for some, if not all, Existing Firms.
If you would like assistance, please contact us. We provide tailored regulatory compliance solutions to clients in the financial services sectors including the development of appropriate compliance procedures in response to regulatory change. For further information, see our brochure (here).
This document has been prepared by McCann FitzGerald LLP for general guidance only and should not be regarded as a substitute for professional advice. Such advice should always be taken before acting on any of the matters discussed.
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