Regulation (EU) No 248/2014 (the “Regulation”) amending Regulation (EU) No 260/2012 (the “SEPA Regulation”) as regards the migration to Union-wide credit transfers and direct debits has been published in the Official Journal of the EU.

Due to the fact that a significant group of Member States are lagging considerably behind the expected SEPA Regulation migration rates, it is very unlikely that all market participants will be SEPA compliant by 1 February 2014, which is the deadline for compliance as set-out in the SEPA Regulation. In order to avoid unnecessary disruption of payments arising as a result of SEPA migration not being fully complete by 1 February 2014, a one-off transitional period of 6 months will be introduced to allow parallel processing of payments in different formats. This should allow payment service providers to continue processing payment transactions through their legacy schemes, alongside their SCT and SDD schemes, as they are doing now.

Therefore, payment service providers may continue, until 1st August 2014, to process payment transactions in Euro in formats that are different from those required for credit transfers and direct debits pursuant to the SEPA Regulation.

The Regulation came into force on 21 March 2014 and applies, with retroactive effect, from 31 January 2014. A copy of the regulation is available here.