The Regulatory Initiatives Grid - consumer credit and payments

The latest Regulatory Initiatives Grid was recently published by the FCA and sets out the regulatory pipeline over a 24-month horizon (covering a variety of sectors such as, banking, insurance, credit and lending, payment services, and investment management) to help firms and other stakeholders manage the operational impact on firms implementing initiatives, and plan forthcoming initiatives.

Following our commentary on initiatives affecting the insurance market. we have highlighted some of the key upcoming initiatives that may impact the consumer credit and payment sectors below.  

Consumer Credit

• FCA Regulation of Buy Now Pay Later
  In February 2023, the second Treasury Consultation Paper on Buy Now Pay Later with draft legislation was published. It is estimated that over the course of 2023 secondary legislation will be presented to Parliament, following this the FCA will consult on the details of the regime. 
  
  
• Reform of the Consumer Credit Act 1974
  Following a public consultation on the reform of the Consumer Credit Act 1971 by Treasury, it is expected to publish a consultation response document in Q2 2023. 
  
  
• Credit Information Market Study Final Report
  Final report due in Q3 2023 in relation to the market study into how the credit information market functions. 

• Access to cash FCA rules
  The FCA expects to consult on any new rules it might propose to make under the new Access to Cash legislation once the Financial Services and Markets Bill 2022 has received Royal Assent. The consultation is expected in Summer 2023. 
  
  
• Payment Services Regulations - Review and Call for Evidence
  HM Treasury is undertaking a statutory review of the Payment Services Regulations alongside an accompanying Call for Evidence. The Call for Evidence is open until 7 April – firms are encouraged to participate. 
  
  
• Consultation on changes to safeguarding requirements for payments and e-money institutions
  The FCA will consult on strengthening requirements for the safeguarding of funds held by payments and e-money firms). The Consultation Paper to be published in H1 2023 with final rules and Feedback Statement expected to be published around end of 2023 / early 2024.

• Consumer Duty
  The new Consumer Duty is currently in the implementation stage, with rules due to come into force by the end of July 2023 for products open to sale or renewal and by the end of July 2024 for closed products. This will have a high impact on firms and could be considered a priory over the new few months.
  
  
• Review of the Senior Managers and Certification Regime
  A review of the Senior Managers and Certification Regime will begin in Q1 2023, with HM Treasury launching a Call for Evidence and the FCA/PRA issuing a joint Discussion Paper.
  
  
• Regulatory framework for approval of financial promotions
  Final rules on the policy proposals to establish a regulatory gateway for authorised firms to approve financial promotions unauthorised firms will be published as soon as the Financial Services and Markets Bill has been finalised.