UK opens review of its administration regime for payment firms

HM Treasury has launched an independent review of PESAR, the Payment and Electronic Money Special Administration Regime.

PESAR was introduced by the Payment and Electronic Money Institution Insolvency Regulations 2021 in response to delays in the administration cases of payment and e-money firms. The regime set new statutory objectives for administrators of these firms, including the objective to return customer funds as soon as practicable.

The purpose of the PESAR review is to help inform the Government about whether the regime is working as intended. According to HMT’s letter appointing Adam Plainer to lead the review, it should assess:

• The impact of the PESAR on individual customers in administration cases where it has been used 
• The extent to which the PESAR would effectively manage the failure of a larger payment firm, given that it has only been used on smaller firms so far
• The efficacy of cooperation between Government authorities, in particular between HMT, the Bank of England, the FCA and the Insolvency Service, and how collaboration could be improved
• The effectiveness of cooperation between the UK authorities and authorities from other jurisdictions

According to the terms of reference, the review may take into account the FCA’s proposals for changing the safeguarding regime for payment and e-money firms. It may also consider developments in the cryptoassets sector.

HMT has asked for an interim update with initial conclusions by September 2025. The final report is due by the end of 2025.

There is no expectation that the review will undertake a public consultation but stakeholders are invited to submit evidence to the review until 30 May 2025.