United Kingdom - Revision history

imported>Doug Williamson: Update payments industry organisations.

2022-10-19T23:01:43Z

Update payments industry organisations.

← Older revision		Revision as of 23:01, 19 October 2022
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	Belfast Bankers' Clearing Company Limited (BBCCL);		Belfast Bankers' Clearing Company Limited (BBCCL);
	Dedicated Card and Payment Crime Unit (DCPCU);		Dedicated Card and Payment Crime Unit (DCPCU);
	~~Financial Fraud Action UK;~~		SWIFT UK; and
	~~Payments Council;~~		UK Finance.
	~~Pay Your Way~~
	~~The~~ UK ~~Cards Association~~; and
	~~SWIFT~~ UK.

	The main organisations active in the payment clearing system are:		The main organisations active in the payment clearing system are:

imported>Doug Williamson: Update.

2022-04-28T20:58:51Z

Update.

← Older revision		Revision as of 20:58, 28 April 2022
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	===Debit cards===		===Debit cards===
	The number of debit card payments is forecast to grow, and spending to increase.		The number of debit card payments is forecast to grow substantially, and total spending on them to increase significantly.

	===Credit cards===		===Credit cards===

imported>Doug Williamson: Remove surplus text.

2022-04-28T20:57:54Z

Remove surplus text.

← Older revision		Revision as of 20:57, 28 April 2022
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	===Debit cards===		===Debit cards===
	In 2013, 45.6% of non-cash payments were made by debit card. In 2012. there were 37.9 million regular users of debit cards, each making 199 payments on average during the year in the UK with an average transaction value of £42.		The number of debit card payments is forecast to grow, and spending to increase.
	The number of debit card payments is forecast to grow ~~from 7.6 billion to 13.8 billion payments between 2012 and 2022~~, and spending to increase ~~from £337bn to £626bn over the same period. It is predicted that in 2022, cards will account for 52% of non-cash payment volumes~~.

	===Credit cards===		===Credit cards===

imported>Doug Williamson: Update for LIBOR transition.

2022-04-25T21:00:05Z

Update for LIBOR transition.

← Older revision		Revision as of 21:00, 25 April 2022
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	===Market benchmarks===		===Market benchmarks===
	The weekly intervention rate is the rate at which the Bank of England is willing to transact business with the money market in negotiable instruments with short-term maturities, notably gilt repo and treasury bills. This rate determines the base rate at which banks in the UK charge for overdraft credit facilities (excluding credit margins), and reflects current UK Monetary Policy Committee policy.		The weekly intervention rate is the rate at which the Bank of England is willing to transact business with the money market in negotiable instruments with short-term maturities, notably gilt repo and treasury bills. This rate determines the base rate at which banks in the UK charge for overdraft credit facilities (excluding credit margins), and reflects current UK Monetary Policy Committee policy.
	The London inter-bank offered rate (Libor) is a composite of the rates at which prime banks in the London market are willing to lend to others, in time periods ranging from overnight up to one year. Administered by the British Bankers’ Association, the rate is released daily, shortly after 11am, and is widely used as a benchmark for setting the interest rate on draw-downs on lines of credit to corporate customers, to which liquidity costs and a margin representing additional risk will be added. On committed lines it is usual for fees to be paid on the unutilised commitment.

	===Short-term borrowing===		===Short-term borrowing===

imported>Doug Williamson: Update for retirement of FRSSE & implementation of FRS 102.

2021-09-23T10:12:18Z

Update for retirement of FRSSE & implementation of FRS 102.

← Older revision		Revision as of 10:12, 23 September 2021
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	===UK GAAP===		===UK GAAP===
	All other unlisted companies, and some subsidiaries of listed groups currently prepare accounts in accordance with UK Companies Act 2006 and UK accounting standards.		All other unlisted companies, and some subsidiaries of listed groups currently prepare accounts in accordance with UK Companies Act 2006 and UK accounting standards.
	~~Very small companies continue to be able to report under the Financial Reporting Standard for Smaller Entities (FRSSE), which gives exemptions from applying all other accounting standards.~~
	UK Companies Act 2006 recognises the Financial Reporting Council (FRC) as the authority that issues accounting standards. The FRC took over that function from the Accounting Standards Board (ASB) in 2012. Accounting standards developed by the ASB are contained in financial reporting standards (FRSs) and statements of standard accounting practice (SSAPs). While some of the SSAPs have been superseded by FRSs, some remain in force (such as SSAP 20, covering foreign currency). Some industries have developed Statements of Recommended Practice (SORPs), which provide further clarification of the application of UK GAAP for those industries. The SORPs can never override the standards. Executive summaries of all UK standards in issue are available on the FRC website (www.frc.org.uk/asb).		UK Companies Act 2006 recognises the Financial Reporting Council (FRC) as the authority that issues accounting standards. The FRC took over that function from the Accounting Standards Board (ASB) in 2012. Accounting standards developed by the ASB are contained in financial reporting standards (FRSs) and statements of standard accounting practice (SSAPs). While some of the SSAPs have been superseded by FRSs, some remain in force (such as SSAP 20, covering foreign currency). Some industries have developed Statements of Recommended Practice (SORPs), which provide further clarification of the application of UK GAAP for those industries. The SORPs can never override the standards. Executive summaries of all UK standards in issue are available on the FRC website (www.frc.org.uk/asb).
	~~Existing UK GAAP standards will be retired and all~~ unlisted entities must apply FRS 102 “The Financial Reporting Standard applicable in the UK and Republic of Ireland” for accounting periods starting on or after 1 January 2015, unless they elect to apply IFRS 101 or ~~the FRSSE~~. FRS 102 is based largely on IFRS for SMEs, which is an IFRS developed by the IASB specifically for small and medium-sized entities. It is a standalone set of reporting requirements contained in one comprehensive standard. The rationale for replacing UK GAAP (as communicated by the ASB) includes the cost of maintaining it and the complexity created by only partial convergence with IFRS.		All unlisted entities must apply FRS 102 “The Financial Reporting Standard applicable in the UK and Republic of Ireland” for accounting periods starting on or after 1 January 2015, unless they elect to apply IFRS 101 or FRS 105. FRS 102 is based largely on IFRS for SMEs, which is an IFRS developed by the IASB specifically for small and medium-sized entities. It is a standalone set of reporting requirements contained in one comprehensive standard. The rationale for replacing UK GAAP (as communicated by the ASB) includes the cost of maintaining it and the complexity created by only partial convergence with IFRS.

	The two main differences with full IFRS are that FRS 102:		The two main differences with full IFRS are that FRS 102:

imported>Doug Williamson: Update for lease standard.

2020-02-11T22:53:49Z

Update for lease standard.

← Older revision		Revision as of 22:53, 11 February 2020
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	In response to the financial crisis and the demands by G20 to achieve global convergence of accounting standards, the replacement project for IAS 39 (which addresses recognition and measurement of financial assets and liabilities) was accelerated. The replacement of financial instruments standards under IFRS and US GAAP are run as separate projects and significantly different models have been proposed. Recently the IASB and FASB renewed their efforts to bring their respective future financial standards closer together at least on some practical level (e.g. by requiring disclosures that could allow users to reconcile the numbers from different accounting models).		In response to the financial crisis and the demands by G20 to achieve global convergence of accounting standards, the replacement project for IAS 39 (which addresses recognition and measurement of financial assets and liabilities) was accelerated. The replacement of financial instruments standards under IFRS and US GAAP are run as separate projects and significantly different models have been proposed. Recently the IASB and FASB renewed their efforts to bring their respective future financial standards closer together at least on some practical level (e.g. by requiring disclosures that could allow users to reconcile the numbers from different accounting models).
	To be applicable in the UK an IFRS must be endorsed by the EU. This endorsement is a complex political process that involves various EU bodies including the European Commission, its expert advisers and the European Parliament. Historically the EU approved most new standards and interpretations within six to nine months of their publication by IASB. Recently EU endorsement of the new standards has become more difficult – for example, the adoption of phase I of IFRS 9, which addressed accounting for financial assets, was deferred in late 2009. In fact, it has been made subject to the completion of the entire IAS 39 replacement project. The original mandatory effective date for IFRS 9 Financial Instruments was 1 January 2013 and was later amended to 1 January 2015. In November 2013, the IASB published IFRS 9 Financial Instruments (2013) and decided to revisit the effective date after all phases of the IAS 39 replacement project were complete and a final version of IFRS 9 issued. The new IFRS 9 became effective from 1 January 2018.		To be applicable in the UK an IFRS must be endorsed by the EU. This endorsement is a complex political process that involves various EU bodies including the European Commission, its expert advisers and the European Parliament. Historically the EU approved most new standards and interpretations within six to nine months of their publication by IASB. Recently EU endorsement of the new standards has become more difficult – for example, the adoption of phase I of IFRS 9, which addressed accounting for financial assets, was deferred in late 2009. In fact, it has been made subject to the completion of the entire IAS 39 replacement project. The original mandatory effective date for IFRS 9 Financial Instruments was 1 January 2013 and was later amended to 1 January 2015. In November 2013, the IASB published IFRS 9 Financial Instruments (2013) and decided to revisit the effective date after all phases of the IAS 39 replacement project were complete and a final version of IFRS 9 issued. The new IFRS 9 became effective from 1 January 2018.
	The IASB published its second exposure draft (the ED) on lease accounting in May 2013. The ED requires that all leases (apart from those shorter than 12 months) are recorded on the balance sheet as debt. If adopted, this new IFRS would represent a significant change and could lead to an increase in reported financial leverage especially for lessees that use operating leases heavily (such as airlines and the majority of the supermarket chains). However, an effective date for the new leases IFRS is unlikely before 2017.

	===UK GAAP===		===UK GAAP===

imported>Doug Williamson: Update post-Brexit.

2020-02-11T22:52:34Z

Update post-Brexit.

← Older revision		Revision as of 22:52, 11 February 2020
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	==Accounting framework==		==Accounting framework==
	Since 2005, UK companies listed on a regulated EU securities market have been required to prepare their consolidated financial statements in accordance with International Financial Reporting Standards (IFRS). Companies listed on the Alternative Investment Market (AIM) are required by the AIM listing rules to prepare IFRS financial statements. Unlisted companies in the UK prepare their financial statements in accordance with UK Generally Accepted Accounting Principles (GAAP). The UK Accounting Standards Board will move all unlisted entities (apart from very small entities and some subsidiaries of groups already reporting in accordance with IFRS) in the UK to new UK GAAP, known as FRS 102 (modelled after an international standard for small and medium-sized entities IFRS for SMEs), by the end of 2015. Alternatively, any UK company can already choose to apply full IFRS (see below).		Since 2005, UK companies listed on a regulated EU securities market have been required to prepare their consolidated financial statements in accordance with International Financial Reporting Standards (IFRS). Companies listed on the Alternative Investment Market (AIM) are required by the AIM listing rules to prepare IFRS financial statements. These requirements continue to apply post-Brexit. Unlisted companies in the UK prepare their financial statements in accordance with UK Generally Accepted Accounting Principles (GAAP). The UK Accounting Standards Board will move all unlisted entities (apart from very small entities and some subsidiaries of groups already reporting in accordance with IFRS) in the UK to new UK GAAP, known as FRS 102 (modelled after an international standard for small and medium-sized entities IFRS for SMEs), by the end of 2015. Alternatively, any UK company can already choose to apply full IFRS (see below).

	===International Financial Reporting Standards===		===International Financial Reporting Standards===
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	An entity applying FRS 102 may not revert to full IFRS in relation to any topic area except for financial instruments. An entity may choose to apply IAS 39 or IFRS 9 in relation to recognition and measurement of financial instruments, but without the accompanying onerous disclosure requirements. Such a choice must be applied consistently from one year to the next. It represents an important win-win position given the significant restrictions on hedge accounting contained in FRS 102. In fact, if the EU endorsement process for IFRS 9 is delayed, then unlisted UK entities would be entitled to apply IFRS 9 general hedge accounting rules (considered as a major improvement on IAS 39) before listed UK groups could. The FRC plans to issue exposure drafts amending FRS 102 in relation to hedge accounting and impairment of financial assets when IFRS 9 “Financial Instruments” is finalised.		An entity applying FRS 102 may not revert to full IFRS in relation to any topic area except for financial instruments. An entity may choose to apply IAS 39 or IFRS 9 in relation to recognition and measurement of financial instruments, but without the accompanying onerous disclosure requirements. Such a choice must be applied consistently from one year to the next. It represents an important win-win position given the significant restrictions on hedge accounting contained in FRS 102. In fact, if the EU endorsement process for IFRS 9 is delayed, then unlisted UK entities would be entitled to apply IFRS 9 general hedge accounting rules (considered as a major improvement on IAS 39) before listed UK groups could. The FRC plans to issue exposure drafts amending FRS 102 in relation to hedge accounting and impairment of financial assets when IFRS 9 “Financial Instruments” is finalised.
	The benefits of FRS 102 include international consistency and alignment to the general principles of full IFRS. Not-for-profit entities, such as housing associations, educational institutions and charities, also known as “Public Benefit Entities”, will have to apply the new UK GAAP as well, with additional guidance covering specific reporting issues not envisaged by FRS 102.		The benefits of FRS 102 include international consistency and alignment to the general principles of full IFRS. Not-for-profit entities, such as housing associations, educational institutions and charities, also known as “Public Benefit Entities”, will have to apply the new UK GAAP as well, with additional guidance covering specific reporting issues not envisaged by FRS 102.
	Subsidiaries of groups that prepare full EU-adopted IFRS consolidated financial statements may apply FRS 101 “Reduced Disclosure Framework” that allows them to keep full IFRS measurement principles (in line with their group reporting) with only limited additional disclosures in their individual standalone entity accounts. In addition to being included in the consolidated IFRS accounts of the parent the subsidiary falls outside EU full IFRS requirements and will not be subject to any objection from shareholders holding 5% or more of total allotted shares in the entity.		Subsidiaries of groups that prepare full EU-adopted IFRS consolidated financial statements may apply FRS 101 “Reduced Disclosure Framework” that allows them to keep full IFRS measurement principles (in line with their group reporting) with only limited additional disclosures in their individual standalone entity accounts. In addition to being included in the consolidated IFRS accounts of the parent the subsidiary falls outside EU full IFRS requirements and will not be subject to any objection from shareholders holding 5% or more of total allotted shares in the entity.

	==Taxation framework==		==Taxation framework==

imported>Doug Williamson: Update post-Brexit.

2020-02-11T22:49:48Z

Update post-Brexit.

← Older revision		Revision as of 22:49, 11 February 2020
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	The Single Euro Payments Area (SEPA) is a European Commission (EC) and European Payments Council (EPC) initiative which has removed the barriers and complexity of making pan European Euro Payments, by adhering to a single set of standards. Importantly, SEPA has aligned the cost of cross-border transfers with that of domestic euro electronic transfers, resulting in significant cost reductions. SEPA is underpinned by the Payment Services Directive, which provides the legal foundation for the creation of an EU-wide single market for payments. Migration of credit transfers and direct debits to SEPA for countries within the eurozone has gradually been completed over the past year.		The Single Euro Payments Area (SEPA) is a European Commission (EC) and European Payments Council (EPC) initiative which has removed the barriers and complexity of making pan European Euro Payments, by adhering to a single set of standards. Importantly, SEPA has aligned the cost of cross-border transfers with that of domestic euro electronic transfers, resulting in significant cost reductions. SEPA is underpinned by the Payment Services Directive, which provides the legal foundation for the creation of an EU-wide single market for payments. Migration of credit transfers and direct debits to SEPA for countries within the eurozone has gradually been completed over the past year.
	Under the SEPA scheme the use of International Bank Account Numbers (IBANs) and Bank Identification Codes (BICs) is now mandatory for cross-border euro payments. This, together with the associated rising costs and penalties of submitting payments with incorrect BIC and IBAN data, means there is a need for cross-border validation at an early stage of the funds transfer process. Migration to BIC and IBAN can be time consuming and costly, particularly for organisations that need to update large numbers of account details.		Under the SEPA scheme the use of International Bank Account Numbers (IBANs) and Bank Identification Codes (BICs) is now mandatory for cross-border euro payments. This, together with the associated rising costs and penalties of submitting payments with incorrect BIC and IBAN data, means there is a need for cross-border validation at an early stage of the funds transfer process. Migration to BIC and IBAN can be time consuming and costly, particularly for organisations that need to update large numbers of account details.
	SEPA Direct Debits (SDD) was first launched in late 2009. This allows Direct Debit originators to collect pan-European Direct Debits from any of the SEPA countries using a single Direct Debit service instead of the country specific services that currently exist. SCT and SDD will eventually replace existing national payment schemes.		SEPA Direct Debits (SDD) was first launched in late 2009. This allows Direct Debit originators to collect pan-European Direct Debits from any of the SEPA countries using a single Direct Debit service instead of the country specific services that currently exist. SCT and SDD will eventually replace existing national payment schemes. SEPA continues to apply to the UK post-Brexit.

	===SEPA Direct Debit (Business to Business Scheme)===		===SEPA Direct Debit (Business to Business Scheme)===

imported>Doug Williamson: Update post-Brexit.

2020-02-11T22:48:12Z

Update post-Brexit.

← Older revision		Revision as of 22:48, 11 February 2020
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	* Non-EU counterparties entering into contracts with EU counterparties.		* Non-EU counterparties entering into contracts with EU counterparties.
	* OTC derivative contracts between non-EU counterparties (where certain conditions are met).		* OTC derivative contracts between non-EU counterparties (where certain conditions are met).
			* The UK post-Brexit.

	===Key obligations===		===Key obligations===

imported>Doug Williamson: Update post-Brexit.

2020-02-11T22:46:22Z

Update post-Brexit.

← Older revision		Revision as of 22:46, 11 February 2020
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	In May 2015, there were 155 banks incorporated in the UK, 104 UK branch authorised European institutions (73 with UK deposit taking authority) and 82 UK branch authorised and deposit taking banks from other countries.		In May 2015, there were 155 banks incorporated in the UK, 104 UK branch authorised European institutions (73 with UK deposit taking authority) and 82 UK branch authorised and deposit taking banks from other countries.
	A list of UK regulated institutions [http://www.bankofengland.co.uk/pra/Pages/authorisations/banksbuildingsocietieslist.aspx is published monthly by the PRA]		A list of UK regulated institutions [http://www.bankofengland.co.uk/pra/Pages/authorisations/banksbuildingsocietieslist.aspx is published monthly by the PRA]
	Britain’s commercial banking sector is ~~the largest in the~~ EU, holding assets of over £5 trillion, with around 50% of total assets held by foreign banks. UK banking sector assets are the fourth largest in the world after China, US and Japan. The UK is also the world’s largest centre for cross-border bank lending, accounting for around a fifth of the world total. The UK's financial services industry contributes around 10% to the total UK GDP.		Britain’s commercial banking sector is larger than those of any EU member state, holding assets of over £5 trillion, with around 50% of total assets held by foreign banks. UK banking sector assets are the fourth largest in the world after China, US and Japan. The UK is also the world’s largest centre for cross-border bank lending, accounting for around a fifth of the world total. The UK's financial services industry contributes around 10% to the total UK GDP.

	==Clearing and payment systems==		==Clearing and payment systems==