We have made a decision on how we will use the money we retain from any financial penalties we impose.

The method for allocating this money is set out in the Financial Penalty Scheme which has been published alongside this document.

Why are we publishing this?

In November 2016 we consulted on our proposed approach to the allocation of the money retained from financial penalty receipts.

We received ten responses and we are now publishing this paper to share our decision with stakeholders and other interested parties.

What decision was made?

We have decided to adopt the approach we proposed in our November 2016 consultation.

In summary that means we will use the money retained from financial penalties paid to us to reduce the amount we collect from payment service providers (PSPs) who pay regulatory fees in the following fees year.

Who should read this?

This policy statement is relevant to:

  • participants in regulated payment systems under FSBRA
  • regulated persons under the IFR and;
  • anybody with an interest in our enforcement process

The relevant legislation and background information

The Financial Services (Banking Reform) Act 2013 (FSBRA, and other legislation under which we operate, such as the Interchange Fee Regulation (IFR), gives us the power to impose penalties.

We are required to pay the penalties we receive to the Treasury, after deducting an amount to cover our relevant enforcement costs. This is the ‘retained amount’ and must be used to benefit participants in the payment systems we regulate, whilst ensuring that persons who were liable to pay penalties do not benefit from the scheme the following year.

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