The Payment Systems Regulator (PSR) has published a policy statement (PS25/2) on its new compliance monitoring framework, setting out the scope of its monitoring work, its approach to compliance monitoring and how, in practice, it will monitor the parties that it regulates. Its approach is informed by three monitoring principles, namely that it should: (i) act in a way which is proportionate and risk-based, (ii) act quickly, and (iii) provide clear, reciprocal engagement. In practice, it monitors firms in three stages, firstly identifying and assessing whether firms are complying with regulatory requirements, then taking action where it identifies non-compliance and finally escalating cases to the Enforcement team where there are concerns that a firm is still non-compliant or investigation in relation to past conduct is warranted. The PSR also engages with and educates firms as part of its supervisory engagement and coordinates with other regulatory bodies.
Alongside the PS25/2, the PSR has published a thought piece which explains why the framework is necessary and how the PSR will work with firms in ensuring compliance. The PSR provides that its next steps include planning changes to its Process and Procedures Guide.
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