THE CENTRAL BANK has come up with a draft framework for the governance policy of operators of payment systems (OPS) to streamline the regulatory approach for the industry.
Stakeholders are given until Jan. 15 to give their feedback on the proposal.
The proposal forms part of the second phase of its development of policies and regulatory frameworks for the implementation of Republic Act No. 1127 or the National Payment Systems Act signed in October 2018.
“This proposed policy provides the regulatory expectations on the governance arrangements and standards to be adhered to by all OPS, including the BSP, being the operator of the country’s real time gross settlement system,” the central bank said.
Based on the draft framework, OPS that also operate with a banking license will have to comply with more rigid regulatory requirements and expectations than those for standalone players.
It also requires OPS to have a risk governance framework where the Board of Directors and management will lay out their business strategy and articulate their risk appetite, risk limits, and as well as risk measurements and management.
The proposal likewise provides benchmarks for disqualification, either permanently or temporarily.
Aspiring officials and officers who are temporarily disqualified to take up posts include those who have unsettled financial obligations before a court or have filed for insolvency, those involved in a closure of an OPS pending clearance from the Monetary Board (MB), and those who were found to have failed to deliver their responsibilities, among others.
Meanwhile, permanent disqualification from becoming a director or official in an OPS are faced by persons who were convicted with violation of laws and regulations related to payment systems, those found culpable for the closure of an OPS, and those who are engaged in businesses that may have a conflict of interest with the OPS.
The MB in June approved the Payment Systems Oversight Framework. Under this, the security settlement falls under the supervision of the Securities and Exchange Commission while the funds settlement issues will be under the regulatory mandate of the BSP. — LWTN