On November 23, 2018, the U.K. Payment Systems Regulator launched a consultation on its proposals to onshore the Regulatory Technical Standards supplementing the EU Interchange Fee Regulation to ensure the RTS can still operate effectively once the U.K. has left the EU. The consultation will primarily be relevant for card schemes subject to the IFR, parties contracting with card schemes and/or processing entities (e.g., issuers, acquirers) and third-party card payment processors.

The PSR is empowered by HM Treasury, under the Financial Regulators' Powers (Technical Standards) (Amendment etc.) (EU Exit) Regulations 2018, to correct deficiencies in the RTS and to maintain them after exit day. The RTS set out detailed requirements for payment card schemes and processing entities, to ensure there is the requisite level of independence in accounting, organization and decision-making processes. The PSR proposes to amend the RTS in line with the draft Interchange Fee (Amendment) (EU Exit) Regulations 2018, published by HM Treasury on November 16, 2018, to onshore the IFR. The PSR's consultation paper includes a draft of the Technical Standards (Interchange Fee Regulation) (EU Exit) instrument 2019.

Comments on the consultation are invited by December 17, 2018. The PSR intends that the finalized version of the EU Exit instrument will take effect on exit day in the event of a no deal scenario.

The consultation paper (PSR CP 18/3) is available at: https://www.psr.org.uk/sites/default/files/media/PDF/CP_18_3_Onshoring_IFR_RTS_Regulation_November_2018_0.pdf and details of the draft Interchange Fee (Amendment) (EU Exit) Regulations 2018 are available at: https://finreg.shearman.com/draft-uk-legislation-published-to-onshore-the-eu-.

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