United Kingdom

The FCA’s Role Under the Payment Services Regulations 2017 & the Electronic Money Regulations 2011

The FCA’s approach sets out the regulatory framework for payment services and electronic money in the United Kingdom, as governed primarily by the Payment Services Regulations 2017 (PSRs 2017) and the Electronic Money Regulations 2011 (EMRs). These regulations establish the legal and operational standards for Payment Service Providers (PSPs) and Electronic Money Institutions (EMIs), aligning the UK’s rules with European directives, particularly PSD2, while adapting to post-Brexit legal realities.

Information & Transparency Obligations

A cornerstone of the FCA’s regulatory framework is the obligation for PSPs to ensure transparency in all stages of the payment process. PSPs must provide comprehensive pre-contractual and transactional information to both payers and payees. This includes identification of the parties involved, amounts, applicable charges, and currency conversion details. These obligations directly support the aims of the WTR, which seeks to ensure that accurate originator and beneficiary information accompanies all wire transfers.

Execution of Payment Transactions

The FCA outlines strict rules around execution time and value dating for payment transactions. These requirements ensure timely and traceable fund transfers, in line with WTR mandates to prevent the misuse of the financial system for money laundering or terrorist financing. Execution rules cover intra-UK transfers, sterling and euro transactions, and the responsibilities of PSPs to ensure correct settlement timelines, especially when dealing with cross-border transfers or different currencies.

Deduction of Charges & Payment Integrity

Regulation 84 of the PSRs 2017 provides that each party to a transaction pays the charges levied by their own PSP, and these charges must not be deducted from the transfer amount unless clearly agreed and transparently disclosed. This mirrors WTR requirements to maintain the integrity of the transferred amount and to ensure transparency and traceability throughout the payment chain.

Regulatory Supervision & Guidance

The FCA, through this document, clarifies its role in issuing non-binding but influential guidance under regulation 120 of the PSRs 2017. It expects firms to comply with the spirit and purpose of EU-derived requirements, including those concerning the traceability of payment flows. The FCA also references its use of systems such as GABRIEL and RegData for the submission of supervisory returns, which include transaction volume and value data. These tools support the regulator’s oversight responsibilities and are consistent with the WTR’s emphasis on systemic compliance monitoring.

Anti-Money Laundering & Risk Controls

While the document does not expressly mention the FATF Travel Rule, it reinforces the importance of maintaining systems and controls that mitigate financial crime risks. Firms are expected to implement risk-sensitive policies and procedures, particularly in high-risk scenarios or when dealing with high-volume or complex transactions. These expectations align with the WTR framework’s requirement for enhanced scrutiny of transfers to and from high-risk jurisdictions.

Customer Communications & Data Accuracy

There is a clear focus on ensuring that all customer-facing information is accessible, understandable, and delivered in a durable format. This reflects the WTR’s concern with ensuring that accurate and complete information about the originator and beneficiary of transfers is preserved throughout the transaction lifecycle.

Conclusion: WTR Compliance Integration

The FCA’s guidance illustrates the operational and compliance landscape that UK PSPs must navigate to meet their obligations under the PSRs 2017. While the document does not explicitly reference the FATF Travel Rule, the underlying principles of transparency, transaction integrity, information traceability, and anti-money laundering due diligence are wholly aligned with the WTR. Institutions regulated by the FCA must therefore integrate WTR compliance into their systems and practices not as a standalone requirement but as an intrinsic part of their regulated responsibilities under UK payment and electronic money law.