PSD3/PSR and the possible end of the exemption for central settlement agents

PSD3/PSR and the possible end of the exemption for central settlement agents

The German legislator has made the commercial agent exemption contained in PSD2 applicable not only to commercial agents, but also to central settlement agents. In future, the PSR will narrow the commercial agent exemption, so that its applicability to central settlement agents will be in question in future.

Central settlement (also called central regulation) is a common f payment settlement method used in the wholesale sector. The central settlement agent (usually a purchasing organization/association group) negotiates purchasing conditions with suppliers on behalf of its members, the associated companies/buyers. Contracts are concluded directly between suppliers and associated companies, and the goods are delivered directly as well. The central settlement agent pays the purchase prices for all affiliated companies collectively to the suppliers on certain due dates (so called “decades”).

Status quo: exemption central settlement agents

Due to the similarity with the commercial agent, who also negotiates on behalf of its principal, the German legislator exempted the central settlement agent from the obligation to obtain a license in the same way as the commercial agent. This is stated in § 2 Para. 1 No. 2 ZAG:

Payment services do not include payment transactions between the payer and the payee via a central settlement agent or commercial agent who is authorized by agreement to negotiate or conclude the sale or purchase of goods or services only on behalf of the payer or only on behalf of the payee.

PSR narrows the definition of commercial agent

In future, however, the PSR, which regulates all exemptions, provides for a narrower interpretation of the commercial agent exemption: recital 11 of the PSR provides that reference should be made to Directive 86/653/EEC for the interpretation of the term “commercial agent”. The “Commercial Agents Directive” defines commercial agent as ” a self-employed intermediary who has continuing authority to negotiate the sale or the purchase of goods on behalf of another person, hereinafter called the ‘principal’, or to negotiate and conclude such transactions on behalf of and in the name of that principal.”

Although the central settlement agent negotiates framework agreements with the suppliers, the central settlement agent does not conclude any transactions on behalf of the associated companies and no brokering takes place after a supplier has been included in the central settlement for the first time. Article 2 (b) PSR narrows the exception as follows:

“payment transactions from the payer to the payee through a commercial agent, as defined in Article 1(2) of Directive 86/653/EEC, provided that all of following conditions are met : i) the commercial agent is authorised via an agreement to negotiate or conclude the sale or purchase of goods or services on behalf of only the payer or only the payee, but not both of them, irrespective of whether or not the commercial agent is in the possession of the client’s funds, and ii) such agreement gives the payer or the payee a real margin to negotiate with the commercial agent or conclude the sale or purchase of goods or services”

It will therefore take some good will to demm central settlement to be within the scope of the definition of commercial agent. Also, the German legislator will no longer have any bearing on the interpretation since a regulation like the PSR is directly applicable law and does not need to be transposed into national law.

How the exemption will be interpreted in future will only become clear in detail once the European Banking Authority (EBA) issues guidelines on the interpretation of the commercial agent exemption. According to recital 11 of the PSR, these guidelines should then also include a list of examples that typically fall under the exemption for commercial agents. Only then will it become clear whether this special German feature for central settlement agents will be retained in the future.

Apart from this it may also be questionable whether the qualification as a commercial agent is even desired in centralized settlement, because the position as a true commercial agent within the meaning of the Commercial Agents Directive is also associated with the commercial agent’s contractually non-excludable claim for compensation, a provision that does not fit to central settlement.

Effects in practice

In practice, however, the impact on central settlement agents is likely to be minimal. This is because most central settlement providers offer central settlement with del credere, i.e. they not only settle the payments of the associated companies to the suppliers, but also assume the payment default risk of the associated companies for the suppliers, either by purchasing the purchase price receivables (factoring) or by granting a payment guarantee. However, neither the factoring business nor the guarantee business are covered by the payment law exemption currently contained in the ZAG or, in future, in the PSR. Consequently, in practice, specialized institutions take over the processing of payment transactions with del credere; such institutions do not depend on the exemption.

There are, however, also other cases that would not fall within the category of a typical central settlement agent, but that have been classified as such by BaFin due to being a central party with power of attorney to act as an intermediary. For these cases, it is likely that it will be more difficult to invoke the exemption in the future.

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