European Payments Council publishes position paper on Brexit and UK PSPs’ participation in SEPA schemes

30 May 2018

On the occasion of the start of the second phase of the Brexit negotiations, in particular the negotiations on a transition period and the scoping of the future relationship between the EU and the UK, the European Payments Council (EPC) publishes a position paper on the subject.

The paper, stating the EPC’s current viewpoint in the face of possible post-Brexit scenarios and their impact on the Single Euro Payments Area (SEPA) schemes, looks at Brexit from the following angles:

• Current situation: UK PSPs participating in the SEPA schemes;
• Transition Period: envisaged agenda of UK leaving the European Union;
• Post-Brexit Scenarios: several scenarios regarding Brexit and UK PSPs’ participation in the SEPA schemes:
  • If the UK leaves the EU but remains in the European Economic Area (EEA), the UK laws and regulations should remain aligned with the EU legal framework which would allow the UK scheme participants to continue their participation in the SEPA schemes.
  • If the UK leaves the EU and the EEA but puts in place a free trade agreement between the EU and UK which results in ‘functional equivalence’ of the EU legal framework, in other words, if the UK implements requirements equivalent to the criteria for participation in the SEPA schemes, this would allow the UK scheme participants to continue their participation in the SEPA schemes. It is not excluded in this scenario that the EPC may have to assess and confirm any functional equivalence of the UK’s legal framework with European Union law.  
  • If the UK leaves the EU and does not remain in the EEA or does not agree on an alignment of its relevant legal framework with that of the EU, the eligibility of the UK to be part of the geographical scope of the SEPA schemes will need to be assessed by the EPC on the basis of an application from the UK PSPs’ community. As the geographical scope of SEPA already extends beyond the EU and EEA, including several third countries and territories, the option remains that the UK continues in the scope of the SEPA schemes, provided it fulfils the eligibility criteria.

Full position paper

© EPC