Member

58: After Clause 22, insert the following new Clause— “Bank of England functions: payment systems and service providers(1) In the Bank of England Act 1998, after Part 3B insert—“Part 3CPayment systems and service providers30J Exercise of functions relating to payment systems and service providers(1) In exercising its relevant payment systems functions in a way that advances the Financial Stability Objective the Bank must, so far as reasonably possible, act in a way which, as a secondary objective, facilitates innovation in—(a) the operation of recognised payment systems,(b) the provision of services by recognised DSA service providers, and(c) the provision of services by service providers in relation to such systems or such DSA service providers,with a view to improving the quality, functionality and economy of the systems and services. (2) For the purposes of this Part the Bank’s “relevant payment systems functions” are—(a) its function of publishing principles under section 188 of the Banking Act 2009,(b) its function of publishing codes of practice under section 189 of that Act, and(c) its function of determining the general policy and principles by reference to which it performs particular functions under Part 5 of that Act (payment systems and service providers).(3) In this Part—“operation” , in relation to a recognised payment system, is to be construed in accordance with Part 5 of the Banking Act 2009 (see section 183 of that Act);“recognised DSA service provider” is to be construed in accordance with Part 5 of that Act (see section 184A of that Act);“recognised payment system” is to be construed in accordance with Part 5 of that Act (see section 184 of that Act).(4) In subsection (1)(c)—(a) the reference to service providers in relation to recognised payment systems is to be construed in accordance with Part 5 of the Banking Act 2009 (see section 206A(2) of that Act);(b) the reference to service providers in relation to recognised DSA service providers is to be construed in accordance with Part 5 of that Act (see section 206A(2A) and (2B) of that Act);(c) the reference to the provision of services by service providers in relation to recognised payment systems or recognised DSA service providers includes a reference to the services and arrangements mentioned in section 183(k)(i) and (ii) of that Act (interpretation).30K Recommendations by Treasury(1) The Treasury may at any time by notice in writing to the Bank make recommendations about aspects of the economic policy of His Majesty’s Government to which the Bank should have regard when considering how to advance the Financial Stability Objective and the secondary objective under section 30J(1) (payment systems etc: innovation).(2) The Treasury must make recommendations under subsection (1) at least once in each Parliament.(3) The Treasury must—(a) publish in such manner as they think fit any notice given under subsection (1), and(b) lay a copy of it before Parliament.(4) The Bank must respond to each recommendation made under subsection (1) by notifying the Treasury in writing of—(a) action that the Bank has taken or intends to take in accordance with the recommendation, or(b) the reasons why the Bank has not acted or does not intend to act in accordance with the recommendation.(5) The notice under subsection (4) must be given before the end of 12 months beginning with the date the notice containing the recommendation was given under subsection (1).(6) Where the Bank has given notice under subsection (4) in relation to a recommendation, it must by notice in writing update the Treasury on the matters mentioned in subsection (4)(a) and (b) before the end of each subsequent period of 12 months.(7) Subsection (6) does not apply if the Treasury have notified the Bank in writing that no update (or further update) is required. (8) The Bank is not required under subsection (4) or (6) to provide any information whose publication would in the opinion of the Bank be against the public interest.”(2) In section 203B of the Banking Act 2009 (payment systems and service providers: annual report)—(a) in subsection (1)—(i) in paragraph (b), for “met” substitute “advanced”;(ii) omit the “and” after paragraph (b);(iii) after that paragraph insert—“(ba) the extent to which, in its opinion, in discharging its relevant payment systems functions, its innovation objective, in its application as a secondary objective, has been advanced,(bb) the efforts it has made to engage with persons, other than persons within subsection (4), appearing to the Bank to have an interest in the discharge of its functions under this Part,(bc) the results of that engagement, and”;(b) after subsection (3) insert—“(4) The following persons are within this subsection—(a) operators of recognised payment systems;(b) recognised DSA service providers;(c) service providers in relation to recognised payment systems or recognised DSA service providers.(5) In this section—“innovation objective” means the objective set out in section 30J(1) of the Bank of England Act 1998 (payment systems etc: innovation);“relevant payment systems functions” has the same meaning as in Part 3C of the Bank of England Act 1998 (see section 30J(2) of that Act).”(3) In section 204(1A) of the Banking Act 2009 (information)—(a) the words “its financial stability objective” become paragraph (a);(b) after that paragraph insert“, or(b) in its application as a secondary objective, its objective set out in section 30J(1) of the Bank of England Act 1998 (payment systems etc: innovation).””Member’s explanatory statement This amendment would insert provisions relating to the exercise of the Bank’s payment systems functions under the Banking Act 2009; including a secondary objective to exercise functions in a way that facilitates innovation in payment systems and related services with a view to improving their quality, functionality and economy.