The Payment and Electronic Money Institution Insolvency (Scotland) (Amendment) Rules 2025
On February 4, 2025, the UK government published new legislation titled The Payment and Electronic Money Institution Insolvency (Scotland) (Amendment) Rules 2025. This article explores the details of this amendment and its implications.
Background
The Payment and Electronic Money Institution Insolvency (Scotland) Rules 2018 established a framework for the insolvency of payment institutions and electronic money institutions in Scotland. These rules aimed to protect the interests of customers and creditors in the event of an institution’s insolvency.
Amendment Overview
The 2025 Amendment introduces several changes to the 2018 Rules. Key amendments include:
- Revised Definition of “Funds Available to Customers”: The amendment clarifies the definition of “funds available to customers,” which determines the amount of funds that customers are entitled to recover in the event of an insolvency.
- Enhanced Provisions for Customer Protection: The amendment strengthens customer protection measures by requiring payment and electronic money institutions to hold customer funds in segregated accounts and to notify customers of the institution’s insolvency status promptly.
- Revised Insolvency Process: The amendment revises the insolvency process for payment and electronic money institutions, including the appointment of a special administrator and the distribution of funds to customers and creditors.
- Clarification of Cross-Border Insolvencies: The amendment provides clarification on cross-border insolvencies involving payment and electronic money institutions.
Implications
The 2025 Amendment has significant implications for payment and electronic money institutions in Scotland:
- Increased Protection for Customers: The enhanced customer protection measures provide additional safeguards for customer funds and ensure that customers are notified promptly of the institution’s insolvency status.
- Improved Insolvency Management: The revised insolvency process aims to streamline and improve the management of insolvencies, ensuring a fair and efficient distribution of funds.
- Increased Clarity for Cross-Border Insolvencies: The amendment clarifies the legal framework for cross-border insolvencies, reducing uncertainty and facilitating cooperation between jurisdictions.
Conclusion
The Payment and Electronic Money Institution Insolvency (Scotland) (Amendment) Rules 2025 introduce important amendments to the 2018 Rules. These amendments enhance customer protection, improve insolvency management, and provide clarity on cross-border insolvencies. By implementing these changes, the UK government aims to ensure the stability and resilience of the payment and electronic money sectors in Scotland.
The Payment and Electronic Money Institution Insolvency (Scotland) (Amendment) Rules 2025
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