Yesterday (May 17) was a busy day of regulatory publications focussing on the current account market. Not only did the Payment Systems Regulator (PSR) publish a policy statement on the application of the Payment Accounts Regulations 2015 in respect of alternative arrangements for switching, but the Competition and Markets Authority (CMA) also issued the following provisional decisions:
- A provisional decision on remedies in its market investigation into retail banking accounts. The CMA has set out a range of proposals to tackle issues such as the perceived lack of competition in the retail and SME banking market (theProposed Remedies Package);
- A provisional decision on its review of the Competition Commission's 2002 banking undertakings in relation to conduct in the provision of banking services to SMEs. The CMA has now provisionally decided that, with the exception of certain undertakings in relation to bundling which prohibit banks from compelling a customer to open or maintain a business current account alongside their loan or deposit account, the undertakings can be released; and
- A provisional decision to revoke the 2008 Northern Ireland Personal Current Account banking order as amended in 2011 (the NI Order).
Whilst all of these developments are of importance to current account providers, the decision to revoke the NI Order applies specifically to the Northern Irish personal current account (PCA) market. In its consideration of this particular decision, the CMA has taken on board representations that the implementation of a single regulatory regime across the UK is preferable to the maintenance of separate requirements for PCA providers in Northern Ireland and Great Britain. Many of the existing requirements under the NI Order are replicated under existing UK legislation (such as the Payment Services Regulations 2009) and regulatory codes (such as theFinancial Conduct Authority's (FCA) Principles for Businesses and Banking Conduct of Business Sourcebook). Certain provisions under the NI Order in relation to switching between payment accounts and providers have also been rendered obsolete by industry initiatives such as the Current Account Switch Service and are addressed by the CMA's Proposed Remedies Package.
Aspects of the NI Order also cover similar ground to the requirements of the EU Payment Accounts Directive (PAD). PAD, which will be implemented into UK law through the Payment Accounts Regulations 2015 referred to above, sets common regulatory standards that EU member states must meet in order to improve the transparency and comparability of fees related to PCAs and facilitate greater access to and switching between accounts. The Payment Accounts Regulations 2015 will come into effect on 18 September 2018.
The proposed revocation of the NI Order is, therefore, unlikely to have a significant impact on day to day operations for PCA providers in the Northern Irish market given that many of the obligations will continue to apply to a similar extent under the broad combination of legislative and regulatory sources mentioned above. That being said, the difficulty for those operating in the PCA market will be in keeping up-to-date with developments such as those above, given the current speed and breadth of regulatory change as well as the number of initiatives impacting the retail banking market emanating from regulatory authorities such as the CMA, the FCA and the PSR.