The EBA submitted its draft RTS to the European Commission in July 2016, setting out requirements for payment card schemes and processing entities under the IFR.
However, the Commission responded in January saying that it will only partially endorse the RTS, and proposing amendments to deal with its concerns
The concerns include the sharing of staff between card schemes and processing entities, and potential sharing of confidential information. Staff should not be shared between the two types of organisation, the Commission said, and it has proposed a two-year ban on staff mobility for senior managers.
The Commission also doubts that the RTS will ensure compliance with general benefits arrangements, if staff benefits depend on the performance of the 'other' entity.
The RTS do not give guidance on its code of conduct, it said, and this should be reviewed by national authorities and enforcement mechanisms defined.
The RTS also lack details of whether directorships in both entities can be held by one person at the same time, it said.
The EBA response said that it agrees with some of the Commission's proposals, but disagrees with others "on the grounds that they appear to assume that card schemes and processing entities are, or should be treated as if they were legally and structurally separated".
This is not a legal requirement imposed in the IFR, the EBA said, and "several of these proposals might result in a disproportionate, difficult, and/or ambiguous application of the RTS for those payment card schemes and processing entities that are not legally separated, or that are organised in separate undertakings within the same group".
A ban on staff mobility would be unduly restrictive, it said, and two years would be excessive compared to existing practice in the auditing and financial services industry. The obligation would also be difficult to enforce where entities are not legally separated, it said.
On benefits arrangements the EBA "is of the view that the origin of the benefits does not necessarily imply a lack of objectivity as long as any potential conflicts are identified and documented. In addition, the EBA is of the view that deleting the reference to the share plans and benefits arrangements could lead to unintended consequences, such as difficulties in the hiring or retention of personnel due to employees’ demotivation and lack of incentives", it said.
The EBA has no objection to adding a reference to the Commission's proposals on the code of conduct, it said. However, national authorities are already empowered to supervise separation requirements, and the wording suggested by the Commission would have to be altered as it is "ambiguous and could be read as suggesting that national authorities would have to approve such code".
Finally, it rejected the Commission's proposed changes on directorships, it said, because "implementing them would create the assumption that the entities should be legally separated, which is beyond the mandate given to the EBA and the Commission".
The EBA has sent the RTS back to the Commission, having made the changes that it agrees with.