The FCA, The Bank of England, the PRA, and the PSR (“the regulators”) have an MoU in place which sets out the high-level framework for working and cooperating with one another in relation to payments in the UK. The Financial Services (Banking Reform) Act 2013 requires they review the MoU annually and on 24th June the results of the latest review were announced.
Review and revisions
The review itself was broadly positive but did highlight improvements that could be made and as such the MoU has been revised.
Overall cooperation and coordination between the regulators is judged to have strengthened since the previous review in December 2024. Information sharing and coordination continues to work well (the press release cites the joint responses to market developments such as the Competition and Markets Authority’s investigations into Big Tech and digital wallets) and the regulators have also successfully coordinated joint policy initiatives and are working together to deliver the National Payments Vision through work such as the Faster Payments System.
However, the review also recognised that there is scope to further strengthen cooperation and, perhaps more surprisingly, to provide greater clarity on roles and responsibilities.
With the above in mind the regulators have made a number of revision to the MoU outlining each of the bodies roles and responsibilities (and also published a Venn diagram setting out how their roles fit together). Additionally, the MoU sets out five broad principles for regulatory cooperation specifically relating to areas such as policy, supervision, authorisations, and strategy work.
Importantly the MoU explicitly states that in exceptional market conditions or other relevant circumstances, the precise arrangements set out in this MoU may not be compatible with the need for one of the regulators to move at pace. In such situations, for example, action may need to be taken without consultation. In this case the Authority will provide the others with notice of the situation and the urgent action that was taken as soon as practical.
Take aways
This is part of the broader push to implement the UK’s National Payments Vision (NPV), a roadmap aimed at fostering a secure, competitive, and innovative payments ecosystem (and in turn foster and support economic growth).
The update also comes ahead of the government’s planned consolidation of the PSR’s functions into the FCA, announced in March 2025. While the PSR’s current remit remains unchanged, the revision acknowledges the growing integration between the two bodies (perhaps exemplified by the fact that The FCA’s executive director for payments and digital finance is also leading the PSR).
Further revisions of the MoU can be expected in future to reflect any formal structural changes that may emerge, but in the meantime, the regulators aim to strengthen their alignment to support the UK’s payments landscape.
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