Proposal For A Framework For Open Financial Services

• Published date: 19 March 2024
• Subject Matter: Finance and Banking, Insurance, Financial Services, Insurance Laws and Products
• Law Firm: Lindahl
• Author: Peter Kullgren, Anna Wahlbom, Dennis Ullstr'm and Adam Lindell

On 28 June 2023, the European Commission presented a proposal aimed at creating a framework for open financial services. There is already an established regulatory framework for data sharing linked to payment services in the form of the Second Payment Services Directive ("PSD2"). The new proposal is aimed at extending the regulations to include financial services in a broad sense through a new regulation ("FiDA") and revising the regulatory framework for payment services through an updated Payment Services Directive ("PSD3") and a new Payment Services Regulation ("PSR"). This article aims to analyse the Commission's proposal regarding the extension of regulations on data sharing to include financial services other than payments and also to highlight the opportunities and challenges to which the proposal may give rise.

"Open financial services" means that a third-party supplier is provided with the ability to access customers' financial information through a range of technological access methods. The introduction of PSD2 served to regulate an access method based on the fact that so-called account servicing payment service providers are required to provide a specific interface ("API") that enables third-party providers to access financial data. For other financial services, there are no such requirements for what are referred to as "data holders", which means that any data sharing takes place in a completely unregulated manner. In such situations, the data sharing is carried out solely by the third-party service provider with the customer's consent and without the involvement of an account servicing payment service provider. The legal conditions for these unregulated methods are unclear, which has meant that the Commission's proposal for a new framework has been welcomed by the Swedish Financial Supervisory Authority and the Swedish Government, among others.¹

AREA OF APPLICABILITY

The FiDA applies to both data holders and data users. A "data holder" means a financial entity that collects, stores or otherwise processes financial information that is subject to the FiDA. A data user is a financial entity that has lawful access to that financial information with the customer's consent. As a starting point, all types of financial entities: credit institutions, insurance companies, securities companies, etc. are subject to the FiDA. However, the FiDA introduces a new entity that is subject to a requirement for a permit, i.e. financial information service providers. Providers of financial...