Article 6 (1) and (2) of the European Union (EU) ‘Regulation (EU) No 260/2012 establishing technical and business requirements for credit transfers and direct debits in euro’, also known as the Single Euro Payments Area () Regulation, mandates that credit transfers and direct debits in the euro area must be carried out in accordance with the relevant requirements set out in Article 5 of, and in the Annex to, the Regulation by 1 February 2014. To avoid difficulties for non-compliant market participants, in February 2014 the European Commission, the European Parliament and EU governments agreed amending the Regulation to give the option to continue processing non- formats in the euro area until 1 August 2014.
1 August 2014 however, did not mark the end of the migration period in the euro area. The European Payments Council () Blog published on 26 February 2015 (see ‘related links’ below) focuses on compliance requirements mandated by the Regulation applicable as of 1 February 2016:
- Transitional arrangements in Member States: the Regulation has introduced several possible exemptions regarding the use of the International Bank Account Number (IBAN), the Business Identifier Code (BIC) and the ISO 20022 XML message standards by the February 2014 deadline. Member States have discretion as to whether they use any or all of the options to derogate from the 1 February 2014 deadline (until 1 February 2016) with regard to the use of the IBAN, the BIC and the ISO 20022 XML message standards by payment service users.
- Niche products, which have been granted an exemption: the Regulation, in particular, stipulates that credit transfer and direct debit transactions with a cumulative market share of less than 10 percent in an Member State must comply with the provisions set out in this legislative act only by 1 February 2016.
The recommendation is that impacted market participants in the euro area actively prepare for the next phase of harmonisation, i.e. expiration of transitional arrangements currently permissible in EU Member States under the Regulation. Get ready for February 2016. Act now.
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