Document ID: chunk:federal_register_of_legislation:F2019N00027:body:0:p14
Version: federal_register_of_legislation:F2019N00027
Segment Type: other
Provision Reference: 
Character Range: 34450–37275

regime for the 2019/20 financial year.
More specifically, the Bank proposes that the varied standards would be effective from 1 July 2019. Issuers would, by that date, make an election as to whether their compliance for 2018/19 would be based on the previous or the revised standards, and would notify relevant schemes of this election so that scheme reporting of compliance is provided on the same basis. While this will mean that schemes will potentially need to prepare certifications relating to different issuers on different bases, it means that the certifications that schemes and issuers provide are done consistently. This approach reflects the fact that the substantive obligation – not to receive net compensation – is placed upon issuers.[26]
The Bank is seeking stakeholder views on this approach to transition. An alternate approach would be to retain the obligation to report under the old standard for 2018/19, and for all participants to move to the new arrangements for 2019/20.
The Bank notes that the anti-avoidance provisions in clause 3 of the standards will be relevant for entities transitioning from the current to the varied regime, and would preclude entities employing strategies that – while being in compliance in each reporting period as they transition from one version of the standard to the other – have the effect of circumventing the standard across the two reporting periods. Relatedly, the Bank expects that the anti-avoidance clause would also be relevant where a scheme and issuer entered into any new, or re-negotiated, agreement before the revised standards come into effect. The Bank expects that any such agreements would be designed to comply with the revised standards.

Proposal 8:
Provide transition arrangements that allow, for the reporting period ending 30 June 2019 only, an issuer to choose whether to comply fully with current standard or fully with the revised standard. The issuer must notify the scheme of their choice, and the scheme must report on the same basis as the issuer for each scheme-issuer agreement. In the event that an issuer fails to notify the scheme of its choice by the date specified in the varied standard, the issuer will be deemed to have elected to comply with the current standard and a scheme must report compliance with the current standard for that scheme-issuer arrangement for the reporting period ending 30 June 2019. Thereafter, issuers and schemes must comply with the revised standard only.

Alternative:
For the reporting period ending 30 June 2019, schemes and issuers must comply fully with the current standards. Thereafter, schemes and issuers must comply with the revised standards.

3.              Next Steps
Section 18(4) of the Payment Systems (Regulation) Act 1998 requires the Bank to consult prior to determining or