New Basis/Rules For UK Participation In SEPA From 1 January 2021

The European Payments Council has issued a press release on the impact of Brexit on Single Euro Payments Area (SEPA), regardless of whether the UK leaves with or without a deal. I have summarised some key data changes below. Firms with queries should email their local national SEPA adherence body. The EPC has previously outlined the implications of a no-deal Brexit on SEPA transactions.

The UK will remain a participant in SEPA but the rules that apply to  transactions to and from the UK and countries in the European Economic Area (EEA) from 1 January 2021 will be the rules that apply to transactions between EEA countries and non-EEA countries. 

So the required content of SEPA instructions to be executed or settled on or after 1 January 2021 involving a UK-based firm that participates in the SEPA scheme will be:

• for SEPA Credit Transfers (SCT) and SEPA Instance Credit Transfer (SCT Inst): instructions from the originator should include the full address details of the originator and the Bank Identifier Code (BIC) of the beneficiary bank, when the originator bank explicitly requests this data element from the originator; and

• for SEPA Direct Debit (SDD) Core and SDD Business to Business (B2B): collection files from the creditor should include the full address details of the debtor and the BIC of the debtor bank, when the creditor bank explicitly requests this data element from the creditor. 

Failure to include these additional transaction details may lead to rejected transactions or other issues from the scheme participant receiving the payment message (beneficiary/debtor bank or their respective interbank clearing and settlement partners). 

UK-based SEPA members should therefore identify their customers that have cross-border SEPA transactions involving both a UK and an EEA payment account, and inform them of the need to provide the extra transaction data from 1 January 2021 (as either execution or settlement date).