Banking and Payments Conduct Regime

The Banking and Payments Conduct Regime applies to the regulated activity of accepting deposits. The regime comprises of the following elements:

• Banking Conduct of Business sourcebook (BCOBS)
• the FCA’s Principles for Business
• the conduct of business requirements of the Payment Services Regulations 2017 (PSRs 2017)
• the Electronic Money Regulations 2011(EMRs)

BCOBS is a sourcebook that applies to firms with respect to the activity of accepting deposits from banking customers in the UK.

A banking customer is defined as:

• a consumer
• a micro-enterprise or
• a charity which has an annual income of less than £1 million

The rules in BCOBS on distance marketing, however, apply only to consumers.

BCOBS contains rules and guidance on:

• communications with banking customers and financial promotions
• distance communications, including the requirements of the Distance Marketing Directive and E-commerce Directive
• information to be communicated to banking customers, including appropriate information and statements of account
• post sale requirements on prompt, efficient and fair service, moving accounts and lost and dormant accounts
• unauthorised and incorrectly executed payments
• cancellation, including the right to cancel and the effects of cancellation

BCOBS applies to accepting deposits to the extent that it does not overlap with a firm’s obligations under the PSRs:

• where a retail banking service is not a payment service within the scope of the PSRs, BCOBS applies in full
• where a retail banking service is a payment service within the scope of the PSRs, parts of BCOBS would not apply

The FCA’s Principles for Business

Firms which are also carrying on an activity regulated under FSMA (for example, accepting deposits or issuing e-money) must comply with the Principles for Business to the extent that these do not conflict with the PSRs.

Conduct of business and the PSRs

The PSRs 2017 set out conduct of business requirements for all payment service providers, including deposit takers. These requirements include:

• requirements for information to be provided to payment service users, and
• specific rules on the respective rights and obligations of payment service users and providers

Read more about Payment Services Regulation at:

• Payment Services and Electronic Money - Our Approach (the FCA's role under the PSRs 2017  and the EMRs 2011)
• Payment Services Regulations
• payment services e-learning
• payment services and e-money stakeholder liaison groups

Electronic Money Regulations

In addition to the conduct of business requirements in the Payment Services Regulations, deposit takers that issue e-money are subject to the conduct of business requirements set out in the Electronic Money Regulations, covering:

• issuing and redeeming e-money, and
• the prohibition on the payment of interest or other benefits linked to the length of time that e-money is held