1.1 EBA updates Single Rulebook Q&A on PSD2
During the period 1 April 2022 to 30 June 2022, the European Banking Authority (EBA) updated its Single Rulebook Questions and Answers (Q&As) publication on Directive (EU) 2015/2366 (Revised Payment Services Directive or PSD2) (the Single Rulebook Q&A). The Q&As in respect of the following articles have been updated:
- Article 68 - Limits of the use of the payment instrument and of the access to payment accounts by payment service providers; and
- Article 97 – Authentication.
A copy of the Single Rulebook Q&A can be accessed here.
1.2 EBA publishes final report on the amendment of its regulatory technical standards on the exemption to strong customer authentication for account access
On 5 April 2022, the EBA published its final report containing draft regulatory technical standards (RTS) amending Commission Delegated Regulation (EU) 2018/389 (SCA RTS) on the amendment of its technical standards on strong customer authentication (SCA) and common and secure open standards of communication under PSD2.
The draft RTS introduce a new mandatory exemption to SCA. The exemption will apply to account providers and will require them not to apply SCA when customers use an account information service provider (AISP) to access their payment account information, provided that certain conditions are met. The amendment aims to reduce frictions for customers using such services, and to mitigate the impact that the frequent application of SCA and the inconsistent application of the current exemption have on AISP services.
The draft RTS also propose additional changes to limit the scope of the voluntary exemption under Article 10 of the SCA RTS to instances where a customer accesses the account information directly and looks to extend the timeline for renewal of SCA from 90 days to 180 days for information which is accessed either through an AISP or directly by a customer.
The final report follows a public consultation which attracted more than 1,200 responses. The EBA has the power to make some changes itself, but further proposed amendments to address these issues would require changes to PSD2 itself, which is beyond EBA capabilities.
The next step is for the draft RTS will be submitted to the European Commission for endorsement, following which it will be sent to the European Parliament and the Council of the EU for their consideration and approval.
A copy of the final report can be accessed here.
1.3 Targeted consultation on the review of PSD2
On 10 May 2022, the European Commission opened a targeted consultation on the review of PSD2. The consultation seeks views from individuals and entities with in-depth technical knowledge and working experience in the field of payments.
The consultation paper notes that the payments market has evolved since the implementation of PSD2 with new market players bringing new payment solutions, services and technologies and that the payment needs of payment service users have changed as a result. The aim of the consultation is ultimately to assess whether the PSD2 legislation remains fit for purpose.
The consultation period ended on 5 July 2022.
A copy of the consultation document can be accessed here.
1.4 E-money Amendment Regulations include a new Regulation regarding non-notification of qualifying holding acquisitions
On 10 May 2022, the European Communities (Electronic Money) (Amendment) Regulations 2022 (E-money Amendment Regulations) were published by the Minister for Finance. The E-money Amendment Regulations came into force and apply from that date. They amend the European Communities (Electronic Money) Regulations 2011 (E-money Regulations). In addition to some administrative provisions, a new Regulation 38A has been introduced into the E-money Regulations.
The new Regulation 38A applies in conjunction with the existing Regulation 38. Regulation 38 addresses the procedure for an acquisition or disposal of a qualifying holding in an electronic money institution (EMI). A person must notify the Central Bank of Ireland (the Central Bank) in writing of a proposed acquisition or disposal of a qualifying holding in an EMI under Regulation 38 of the E-money Regulations.
Regulation 38A provides for an application to court in circumstances where an acquisition of a qualifying holding in an EMI is concluded without notification being made to the Central Bank. If the court is satisfied that the failure to so notify was inadvertent and it is in the interest of justice to do so, an order may be made requiring (i) the person to provide all necessary information to the Central Bank in respect of such qualifying holding and (ii) the Central Bank to make an assessment of the qualifying holding in accordance with Regulations 40-42 of the E-money Regulations.
The E-money Amendment Regulations can be accessed here.
2. DIGITAL FINANCE & CRYPTO-ASSETS
2.1 Regulation (EU) 2022/858 of the European Parliament and of the Council of 30 May 2022 on a pilot regime for market infrastructures based on distributed ledger technology is published in the OJ
On 2 June 2022, Regulation (EU) 2022/858 (DLT Regulation) of the European Parliament and of the Council of 30 May 2022 on a pilot regime for market infrastructures based on distributed ledger technology (DLT), and amending Regulations (EU) No 600/2014 (MiFIR) and (EU) No 909/2014 (Central Securities Depositaries Regulation or CSDR) and Directive 2014/65/EU (MiFID II) was published in the Official Journal of the EU (OJ).
The DLT Regulation aims to develop the trading and settlement for 'tokenised' securities. The DLT Regulation entered into force twenty days following its publication in the OJ, on 22 June 2022 and the majority of its provisions will apply from 23 March 2023.
The DLT Regulation can be accessed here.
2.2 Travel Rule Regulation: Provisional agreement reached on proposed Regulation on transparency of crypto-asset transfers
On 29 June 2022, the European Council published a press release announcing provisional agreement on the updating of rules on information accompanying the transfer of funds by extending those rules to crypto-assets, the so called "travel rule". The European Parliament also published a press release on the agreement. The proposed travel rule Regulation will ensure financial transparency on exchanges of crypto-assets and will enable the EU to monitor and deal with the risks these technologies are exposed to with regard to money laundering and terrorist financing (ML/TF).
The rules set out new obligations on crypto-asset service providers (CASPs) regarding the collection and provision of information about the originator and the beneficiary of the transfer of crypto-assets they operate. To comply with the travel rule Regulation CASPs will have to implement internal policies, procedures and controls to ensure compliance with EU restrictive measures and to obtain all relevant information for transfers of crypto-assets.
It was agreed that urgency is required to ensure the traceability of the transfer of crypto-assets and the co-legislators chose to align the application of the travel rule Regulation with the markets in crypto-assets (MiCA) Regulation.
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