The Financial Services (Banking Reform) Act 2013 sets out that the payment systems regulator and the Bank of England, along with the FCA and PRA, will be under a duty to co-ordinate the exercise of their relevant functions. The regulators will draw up a memorandum of understanding describing their respective roles and how they intend to comply with the duty to co-ordinate.
The legislation sets out that the Bank of England will have a power, where certain conditions are satisfied, to give the payment systems regulator a direction not to exercise a power or not to exercise it in a specified manner. The payment systems regulator will also be under a duty to consult the Bank of England, along with the FCA and PRA, on any proposal to impose a generally applicable requirement.
The legislation also specifies that the Bank of England will not be considered as a participant of any kind in a payment system for the purposes of regulation by the payment systems regulator. The payment systems regulator will be required to have regard to the importance of maintaining the stability of, and confidence in, the UK financial system and the importance of payment systems in relation to the performance of functions by the Bank of England in its capacity as a monetary authority.
This structure will deliver a focused regulator of payment systems that is able to co-ordinate effectively with other key bodies in this area.