No-deal Brexit i.e. how a British payment services provider can operate in Poland

On April 2^nd, 2019 the Act of March 15^th, 2019 on the rules of conducting business by some entities in the financial sector in connection with the occurrence of the United Kingdom of Great Britain and Northern Ireland exiting the European Union without concluding the agreement referred to in art. 50 section 2 of the Treaty on European Union. The Act in question introduces a temporary regime for different types of entities from the financial market, which will be triggered if the no-deal or hard Brexit takes place. The temporary regime (in different scope) covers e.g. banks, electronic money institutions, payment institutions, insurance firms and investment firms. Below you can find a short description of the temporary regime applicable to British payment services providers.

The temporary regime for British payment services covers in particular the following entity categories:

1. British electronic money institution providing payment services in Poland in any possible form, i.e. (i) through branch, (ii) on a cross-border basis (direct provision of services) or (iii) through an agent,
2. British payment institution providing payment services in Poland in any possible form, i.e. (i) through branch, (ii) on a cross-border basis (direct provision of services) or (iii) through an agent,
3. British provider solely of the service of access to account information which provides access to account information in Poland in any possible form, i.e. (i) through branch, (ii) on a cross-border basis (direct provision of services) or (iii) through an agent.

The temporary regime enables the above mentioned British payment services providers – within 12 months from the day the no-deal Brexit happens as well as within the license granted by the Financial Conduct Authority (FCA) – to perform the following activities:

1. exercise of single payment transactions (i.e. transactions not covered by a framework agreement),
2. exercise of a framework agreement concluded before the day the no-deal Brexit happens, up to the date on which (the earlier event is decisive): (i) cease of the framework agreement, (ii) lapse of 12 months from the day the no-deal Brexit happens, (iii) obtaining a license to provide payment services or issue e-money in Poland,
3. exercise of e-money issuance agreement concluded before the day the no-deal Brexit happens, up to the date on which (the earlier event is decisive): (i) cease of the framework agreement, (ii) lapse of 12 months from the day the no-deal Brexit happens, (iii) obtaining a license to provide payment services or issue e-money in Poland.

What’s significant, within the temporary regime Polish Financial Supervision Committee (KNF) shall have the right of supervision over the British payment services providers operating in Poland.

According with the KNF’s statement of March 29^th, 2019 the above regulation shall serve the British payment services providers as a measure to mitigate the negative effects of a no-deal Brexit, which will impact customers, by ‘undertaking effective adaptation measures (i.a. by obtaining the relevant KNF licenses or transferring the financial services portfolio) or gradually winding-up the operations’. KNF’s statement can be found here (Polish only).