The status of transposition of PSD2 into Icelandic national legislation
Two years have passed from the deadline for Member States of the European Union to transpose Directive 2015/2366 on Payment Services into their respective national legislation. The Directive, more commonly referred to as PSD2, is meant to support competition and consumer protection in the payment services market, as well as to support product development and innovation. The Directive also introduces several complex technical standards with which Member States are required to comply, including on strong customer authentication. As a party to the EEA Agreement, Iceland is required to transpose the Directive into national legislation, once the Directive enters into effect under the EEA Agreement.
The Directive was incorporated into the EEA Agreement on 14 June 2019 by decision of the EEA Joint Committee. However, it has not entered into effect under the EEA Agreement, as both Iceland and Norway have yet to fulfill constitutional requirements, which were made by both countries regarding the incorporation of the Directive into the EEA Agreement. Despite this, both Norway and Liechtenstein have implemented the Directive into their respective national legislation; Liechtenstein in full, and Norway partially.
However, the Directive has not been transposed in any way into Icelandic national legislation and it is apparent that transposition is not scheduled in the Icelandic parliament’s current session. Other EEA states are therefore considerably ahead of Iceland in their work towards transposition. In the Minister for Foreign Affairs’ report on the operations of the EEA Agreement dated 10 October 2019, it is assumed that the Directive will be transposed via amendments to the currently applicable payment services act in the Parliament’s next congress, i.e. in autumn 2020 – spring 2021, but the exact timing is not apparent at this stage. A draft Bill has furthermore not been published on the government’s public liaison web forum (samradsgatt.island.is).
Therefore, there is very little information to be shared with regards to when and how the Directive will be transposed at this stage. LOGOS will however continue to keep up to date on the transposition process as well as the effect on which technical developments and legislation relating thereto have for financial services in general.
Should you require assistance or information about to the above topic, please contact Benedikt Egill Arnason or Olafur Arinbjorn Sigurdsson, partners at LOGOS and experts on financial services and FinTech.