The PSR is consulting on draft guidance setting out how it proposes to make decisions on whether to grant an extension or exemption to a specific direction or requirement.   

Specific directions and requirements are important tools the PSR uses to require firms to implement changes which improve payments for people and businesses across the UK – like the Confirmation of Payee name checking service, and authorised push payment (APP) fraud reimbursement measures.    

The PSR recognises, however, that there may be circumstances when an extension or exemption may be appropriate. The proposed guidance provides firms with clarity on how and when to engage with the PSR to find an effective way forward in these situations.  

The PSR’s proposal is that the bar for granting an extension or exemption is a high one. It’s crucial that all firms are incentivised to comply with the regulator’s directions so that everyone who uses payment systems sees improved outcomes as quickly as possible.   

Oliver Hanmer, Head of Supervision and Compliance Monitoring at the PSR, said:

“This proposed guidance aims to increase transparency for firms around the factors we look at when considering exemption or extension requests, and ultimately supports the delivery of our objectives.   

“To be clear, by consulting on this guidance we are not facilitating a route to non-compliance. We propose the bar for exemptions and extensions as a high one because we want as many people and businesses as possible to benefit from the action we take.  

“We will always start from a position that we expect all directed firms to have taken the necessary steps towards achieving compliance by the set deadlines.” 

What does the proposed guidance say?

The PSR expects to grant extensions and exemptions only in very limited circumstances. The guidance proposes four key factors for the PSR to use as a starting point when considering an extension or exemption request. These are:  

  • Whether granting an exemption or extension would adversely impact payment systems users, undermine any of the PSR’s statutory objectives, or undermine the priorities set out in the PSR’s five-year Strategy. If granting the request undermined these objectives, the PSR would be unlikely to grant it.   

  • The context in which the specific direction or requirement arose, including the underlying policy aims and the key factors set by the specific direction or requirement.    

  • The burden that not granting the request would place on the regulated firm, as well as any impact on businesses or consumers more widely.   

  • In relation to extension requests, the steps the regulated party has taken to ensure that it will comply with the rules in a timely manner and that any risks to service users and/or markets have been mitigated.    


Notes to editors:  

  • This consultation is open until 3 June 2024.    

  • This proposed guidance only applies to specific directions and requirements. It does not apply to general directions, or generally applicable regulatory requirements. It also does not apply to exemptions or extensions when using our powers under concurrent competition law.    

  • More information about our regulatory framework can be found here. A list of our specific directions and requirements can be found here.