Question to the HM Treasury:

To ask His Majesty's Government why the powers which they propose to confer on the Financial Conduct Authority through the insertion of new section 131Z12 to the Financial Services and Markets Act 2000 are not subject to a right to a full merits-based appeal, such as to the Competition Appeal Tribunal.

The Financial Services and Markets Bill simplifies how payment systems are regulated by abolishing the Payment Systems Regulator (PSR) and transferring its responsibilities to the Financial Conduct Authority (FCA). In doing so, it gives the FCA objectives and powers generally equivalent to those currently held by the PSR, including the ability to make rules or give directions for the purpose of regulating payment system fees and charges. This ensures there is continuity in regulation and that the FCA can carry out its new responsibilities effectively.

The FCA’s power to regulate payment system fees and charges would be subject to challenge on judicial review principles. A challenge to equivalent powers held by the PSR is determined by judicial review principles, and the Bill maintains the same test when those functions transfer to the FCA. This is also consistent with the existing approach taken elsewhere in the Financial Services and Markets Act 2000.

The Government recognises that regulators’ powers should be subject to appropriate safeguards. Powers to regulate payment system fees and charges must advance payment systems objectives. The Bill ensures before exercising those powers, the FCA must comply with procedural requirements, such as undertaking a consultation, which help to ensure decisions are transparent, evidence-based and proportionate.