EMA publications

The EMA frequently responds to government and European consultations on regulation that impacts the e-money and payment services industry. Sometimes, we also express our views on issues that are raised in the public domain where we feel it is important to provide an industry input.

Our publications reflect the views of the EMA as whole; individual members’ views may vary from time to time. The public consultation responses are listed below. For further information on these positions, please contact us.

EMA response to FCA CP24/20 on changes to the safeguarding regime for payments and e-money firms

The EMA submitted a response to the UK FCA CP24/20: Changes to the safeguarding regime for payments and e-money firms.

The response highlights:

  1. Fundamental Disagreement with FCA’s Approach:
    • The EMA believes the proposed changes fail to address issues effectively. Most problems arise from non-compliance with existing rules, which could be resolved with enhanced supervision and enforcement, rather than a wholesale overhaul of the safeguarding regime.
  2. Incompatibility with Payment Industry Dynamics:
    • The proposals, drawn from regimes like CASS for investment firms, are unsuitable for the real-time, dynamic nature of payment businesses. They fail to consider distinct payment flows and operational realities, potentially stifling innovation and reducing competitiveness.
  3. Cost and Operational Burden:
    • The changes are expected to impose significant operational costs, including redesigning systems, hiring additional staff, and extending safeguarding obligations. Some firms may prioritise investments in jurisdictions outside the UK or even consider ceasing operations in the UK due to the increased burden.
  4. Statutory Trust Concerns:
    • The introduction of a statutory trust could lead to complex legal issues, altering the fundamental nature of e-money issuance. This would create conflicts in ownership rights and complicate insolvency proceedings without providing meaningful improvements in consumer protection.
  5. Impact on UK Competitiveness:
    • The UK’s safeguarding regime would diverge significantly from the EU, creating additional costs and operational friction for firms operating across both regions. This undermines the FCA’s goal of fostering a competitive financial sector.
  6. Inadequate Cost-Benefit Analysis:
    • The cost-benefit analysis fails to account for numerous significant costs, including legal, operational, and compliance expenses. It also overestimates the benefits, such as reduced fund distribution timelines, which are unlikely to be realised under the proposed regime.
  7. Lack of Consideration for Alternatives:
    • The EMA highlights that alternatives, such as applying the Financial Services Compensation Scheme (FSCS) to e-money and payments or providing safeguarding accounts at the Bank of England, have not been adequately explored.
  8. Call for a Phased and Measured Approach:
    • The EMA suggests pausing the implementation of end-state rules to assess the impact of interim rules. It advocates for targeted, proportionate measures that reflect the operational realities of payment firms and the evolving financial landscape.

Read the full response here

EMA response to FCA CP24/20 on changes to the safeguarding regime for payments and e-money firms Read More »

Joint industry letter to ESMA and EU Commission on Authorisation Process for CASPs

The EMA co-signed a joint industry letter to ESMA and the European Commission on the authorisation process for Crypto Asset Service Providers (CASPs) under MiCA.

The letter addresses concerns over regulatory delays, inconsistent transitional measures, and potential service disruptions. It calls for harmonised authorisation requirements, extended transitional periods, and supervisory flexibility to ensure a smooth implementation of the MiCA framework, safeguarding consumer access and market stability.

Read the full letter here

Joint industry letter to ESMA and EU Commission on Authorisation Process for CASPs Read More »

Joint industry letter to the Commission on CESOP

The EMA co-signed an industry letter to the European Commission addressing challenges in implementing the Council Directive (EU) 2020/284 of 18 February 2020, amending Directive 2006/112/EC as regards introducing certain requirements for payment service providers (CESOP Directive) and the associated mitigation measures.

The letter emphasises the need for streamlined registration processes, harmonised requirements across Member States, and a one-stop-shop reporting system. It also advocates for a moratorium on penalties during the initial compliance period, ensuring smoother adoption of CESOP reporting requirements.

Read the full letter here

Joint industry letter to the Commission on CESOP Read More »

Joint industry letter on Eurosystem policy statement on non-bank PSP access

The EMA co-signed a joint industry letter to the European Central Bank expressing concerns over the Eurosystem policy on non-bank PSP access to central bank-operated payment systems and accounts. The letter advocates for a calibrated approach to safeguarding funds with central banks, addressing economic barriers to direct participation, and extending transitional periods to ensure business continuity and maintain competition in the financial services sector.

Read the full letter here

Joint industry letter on Eurosystem policy statement on non-bank PSP access Read More »