Global menu

Our global pages


Payment Systems Regulator (PSR) publishes final guidance on concurrent competition powers

  • United Kingdom
  • Competition, EU and Trade - Competition e-briefings


The PSR has published two guidance documents on its competition law powers, following a consultation launched in January of this year. The first concerns its market reviews, market studies and market investigation reference powers (“Markets Guidance”) and the second covers its Competition Act 1998 powers (“CA98 Guidance”).  This follows the publication of the FCA’s final guidance on its concurrent competition law powers last month (see our update here).

The PSR’s aim has been to adopt similar procedures to the FCA (its parent organisation), in recognition of the advantages of alignment for stakeholders regulated by both authorities.  As such, the guidance documents are based extensively on the FCA’s guidance, and took into account responses to the FCA’s consultation process, the PSR’s own process and comments made at the organisations’ joint stakeholder meeting about the draft guidance.  However, as explained below, the PSR does not intend to follow the FCA on all points.

Markets Guidance

The PSR can use its concurrent competition powers under the Enterprise Act 2002, to conduct market studies relating to participation in payment systems.  This sits alongside its power to conduct a market review under the Financial Services (Banking Reform) Act 2013 (“FSBRA”).  If the PSR finds that the relevant markets could be made to work better, it has a range of regulatory powers as well as the competition law power to make a market investigation reference to the Competition and Markets Authority, the (“CMA”)1

The Markets Guidance outlines the procedure for regulatory market reviews, Enterprise Act (competition law) market studies and making market investigation references. Relatively few submissions were received in respect of this guidance. Some of the concerns centred around the PSR’s wide discretion to choose whether to do a market review or a market study.  The PSR has confirmed that its choice of tool will depend on the aim of the exercise. Furthermore, it has stated that, while it will aim to choose the most appropriate tool at the outset, it is entitled to switch between market studies and market reviews as it chooses.

Respondents to the consultation called for the PSR to confirm that it would only use regulatory powers to take action at the end of a regulatory market review and competition law powers at the end of a competition law market study.  Instead, the PSR confirmed that it could use either set of powers, despite the choice of tool.

CA98 Guidance

As of 1 April this year the PSR has had the power to enforce the EU and UK law prohibitions against anti-competitive agreements and abuse of a dominant position. A number of issues were raised by stakeholders in respect of the CA98 Guidance. Stakeholders were concerned about two aspects in particular: issues around the self-reporting duty (General Direction 1) and the requirement for parties to settlement proceedings under CA98 to waive their right to appeal to the Competition Appeal Tribunal.  Perhaps unsurprisingly, these were also two of the key issues arising from the FCA consultation.

General Direction 1 – Self-reporting

General Direction 1 (“GD1”) states: “A participant must deal with the Payment Systems Regulator in an open and cooperative way and must disclose to the Payment Systems Regulator appropriately anything relating to the participant which could materially adversely impact on the advancement of the Payment Systems Regulator’s statutory objectives and duties”.  This requirement is similar to the FCA’s Principle 11, although it is narrower, only requiring disclosure of events/issues that could materially adversely affect advancement of the PSR’s objectives and duties. 

During the consultation concerns were raised regarding the scope of this duty, and in particular whether the disclosure obligation is consistent with the privilege against self-incrimination and the CMA’s competition leniency policy.  

In terms of scope, several respondents felt that the requirement to notify a breach of ‘any applicable competition law’ was too wide. The PSR was not prepared to limit the scope of the obligation in light of these comments citing the global nature of payment systems as a reason for considering breaches of competition law in jurisdictions outside the UK and EU as potentially relevant to its objectives.

It has further declined, unlike the FCA, to introduce any further materiality threshold to GD1 given that, according to the PSR there is already a materiality threshold inherent in the concept of ‘infringement’: breaches under competition law must have an appreciable effect on competition and trade within the UK or between EU Member States and firms are only required to notify issues that ‘materially’ and ‘adversely’ impact on the advancement of the PSR’s statutory objectives and duties under GD1.

The proposed amendments to the FCA’s Supervision (‘SUP’) Handbook were criticised during consultation for including an obligation to notify if an entity has or may have infringed competition law.  While the PSR has indicated that it will consult and publish guidance on GD1 in due course, it has confirmed that it applies to possible and past infringements of competition law, where these could materially adversely impact on the advancement of the PSR’s statutory objectives and duties. Taking this approach the PSR clearly risks facing a multitude of ‘failsafe’ applications. Until guidance is published, the PSR has urged firms to take a “sensible” approach to GD1.

In relation to the privilege against self-incrimination, the PSR did not consider that GD1 obligation conflicted with this and made no changes to the proposed guidance. According to the PSR there are already ample protections and procedural safeguards enshrined in competition law. Furthermore, since the PSR only requires firms to give the ‘facts and circumstances’ of an infringement, they are not required to make any admissions or confessions as part of a GD1 notification.

Like the FCA, the PSR does not consider that there is a conflict between the GD1 obligation and the leniency regime: GD1 is an ongoing obligation to be transparent with the PSR, including about actual or possible competition law infringements, leniency is a voluntary regime for parties who have participated in cartels specifically.  GD1 is not therefore synonymous with the discretionary activity of applying for leniency. 

Although the PSR can accept leniency applications, it recognises that it does not have the experience of the CMA and more importantly for applicants, it cannot grant immunity for the cartel offence.  Therefore, as with the FCA, the PSR expects leniency applications to be made to the CMA directly. Leniency information that the CMA passes to the PSR will only be used for competition law enforcement (unless the leniency applicant agrees otherwise).   

Waiver of right of appeal

While the PSR has followed the FCA’s approach on the majority of issues, it has taken a different approach on one of the more contentious issues, namely the proposed right of the regulator to ask parties wishing to settle Competition Act 1998 (CA98) cases with the PSR to waive their right of appeal to the Competition Appeal Tribunal.

Despite concerns raised during the FCA’s consultation process, the FCA confirmed in its recent guidance that it will retain this right.  By contrast, the PSR will not require a waiver of the right of appeal for CA98 cases (although it may do so in settlement procedures under the FSBRA regulatory regime).  This, the PSR notes, is in line with the approach of the CMA and a number of other regulators.  


In many respects the PSR has followed the FCA’s approach to its concurrent competition law guidance but in relation to its policy on waiver of the right of appeal in settlement cases, the PSR has shown a willingness to strike out from the path taken by its parent organisation. The PSR has departed from the FCA's approach in other ways, for example its refusal to narrow the scope of the GD1 reporting obligation, or to introduce any additional materiality threshold.

While the PSR has made some changes in response to stakeholder feedback, there still remain a considerable number of questions unanswered on some of the key issues.  In particular there is much uncertainty around the GD1 self-reporting obligation. The PSR has suggested that it may issue guidance on GD1, which it would consult on, although it has given no certainty as to when or if this will come. In the meantime, stakeholders are asked to take a ‘sensible’ approach and engage with the PSR if they are unsure. The proposal to issue guidance is welcome, particularly given the serious consequences of getting it wrong. 

Timing is of particular concern where a leniency application might be required. As with the FCA’s Principle 11 procedure, notification under GD1 essentially forces a firm’s hand in making a leniency application at the same time as a GD1 notification: in order to qualify for immunity from fines under the CMA’s leniency regime a firm must be the first to come forward and there must be no pre-existing investigation. Given that a GD1 notification for conduct that could constitute a cartel could result in an investigation being launched, companies could be left with little choice but to approach the CMA/PSR in relation to leniency much earlier than they might otherwise choose. Furthermore, for international companies it will also be necessary to consider whether leniency applications in other jurisdictions are required.

Given the duality of regulation and the new and real risk of competition law enforcement, the need for competition law compliance is paramount and firms would be well advised to ensure they have their house in order to avoid the need to self-report and the consequences that can then ensue.

1 A market investigation is an in-depth, 18 month review of the market(s) concerned (extendable by 6 months).  If the CMA decides that there are one or more adverse effects on competition, it is under a duty to take such actions as it considers reasonable and practicable to remedy/prevent the adverse effect on competition and any resultant detrimental effect on customers.