Rwanda
Regulation of the National Bank of Rwanda relating to the Oversight of Payment Systems and the Activities of Payment Service Providers
Regulation 6 of 2010
- Published in Official Gazette special on 30 December 2010
- Assented to on 27 December 2010
- Commenced on 30 December 2010
- [This is the version of this document from 30 December 2010.]
Chapter One
General provisions
Article 1 – Purpose
This regulation sets forth the rules governing the oversight of the activities of payment service providers and the payment systems.Article 2 – Definitions
Terms and expressions used in this regulation have the following meaning:“Authority” means the National Bank of Rwanda and other oversight authorities operating in other countries;“Central bank” the National Bank of Rwanda;“Operator”: the entity that is in charge of the operation or administration of the payment system;“Participant”: an entity that has a role in the Payment System or one of the parties to an arrangement that establishes a System, including its Operator. There may be an entity that has a direct role with rights in the Payment System and the other with indirect rights that is able to settle only through the accounts of a direct Participant.Chapter II
Oversight Authority
Article 3 – General Authority to impose conditions
The Central Bank may, by notice in writing, at any time after initial operation of a system impose on a participant, an operator or the settlement agent of a system or a payment service provider such conditions or restrictions as the Central Bank may see fit, up to suspension of the license, in respect of any of one or more of the following:a)the conditions to be met by any person in order to have access or to become a Participant of the System;b)the operation of the payment system service, including the clearing and settlement arrangements to be followed;c)the interaction of the System with other systems;d)the relationship of the system with its participants;e)the appropriate actions to be taken by the Participant or class of Participants, or the operator or the settlement agent, in relation to its business;f)the appointment of a person approved by the Central Bank to advise the participant or class of participants, or the operator, the settlement agent or payment service provider, on the proper conduct of its business;g)netting arrangements;h)risk sharing and risk control mechanisms;i)certainty of settlement and finality of transfers;j)the nature of financial arrangements among participants;k)the operational systems and financial soundness of the Clearing House; such other matters that in the view of the Central Bank pertain to a risk to the financial system;The conditions will apply if any function of the operator or the settlement agent or the payment service provider is outsourced; and such other matters as the Central Bank may consider necessary or expedient or in the interests of the public or a section of the public.The Central Bank may, at any time, by notice in writing to a participant, an operator or a settlement agent or the payment service provider, vary any condition or restriction as the Central Bank may see fit.The Central Bank shall, prior to issuing any written directive under this article, consult the person to whom it is directed.The Central Bank may by a written directive specify that the operator of a system or a participant in such a system or payment service provider shall, within such time as the Central Bank considers necessary:a)cease or refrain from engaging in an act or course of conduct;b)perform such acts as in the opinion of the Central Bank are necessary in the public interest; orc)make, amend or repeal a system or payment service rules.Every directive issued under this article shall be communicated to the person to whom it is directed and shall come into force from the date of its issue. A directive is binding on the person to whom it is directed.As soon as it is practicable after implementing a direction and completing any actions required to be taken in connection with it, the person to whom it is given shall notify the Central Bank that the direction has been implemented and the action completed.Article 4 – Authority to approve or remove officers and directors
The Central Bank has the authority to approve the chief executive officer and directors of an Operator prior to the granting of the license to operate a System or to provide a payment service in Rwanda.The Central Bank has the authority to reject a proposal for a chief executive officer or director for a System's Operator or for payment service provider based on a determination of insufficient or inappropriate experience, personal bankruptcy, and conviction of an offense involving fraud or dishonesty or imprisonment of more than 6 months.The Central Bank may request the removal of a chief executive or director where said person has without reasonable justification failed to uphold the rules contained in this regulation, experienced a personal bankruptcy, and has been convicted of an offense involving dishonesty or fraud or imprisonment of more than six months. The Central Bank must submit this in writing to the Operator or to the payment service provider and allow the individual to be heard.Article 5 – Authority to perform inspection
The Central Bank shall have the power to inspect the premises of a payment or securities settlement system operator or a payment service provider as part of its oversight powers and on a periodic basis as part of an inspection regime. This may be performed with or without a written request.At such time, the Central Bank has the power to inspect and retain any books, premises, equipment, or other items as deemed necessary for the purpose of ensuring its compliance with the Central Bank regulations.The Central Bank has the power to interview the staff of payment systems operator, participants, payment services providers, including those of issuers of payment instruments, as well as any third parties to whom part of services have been outsourced.Article 6 – Access to information
The Central Bank may request that payment services providers, any participant, operator or other person acting on behalf of the service provider or operator or settlement institution, to provide to the Central Bank within the period specified in a notice, all such information as may be required by the Central Bank.The Central Bank may prepare and publish consolidated statements aggregating any information provided under this regulation for statistical purposes, or any other statements that relate to or are derived from any information provided under this Regulation.Article 7 – Central Bank role and authority to determine actual existence of a System
The Central Bank may, where it has reasonable grounds to believe that a system or arrangement exists for the clearing and settlement of payment obligations or clearing and/or settlement of securities, request a person who is a party to the system or arrangement to provide it with further information, records and documents relating to the system or arrangement as the Central Bank may require, in order to make a determination on the existence of a system covered by this regulation.Every person who is required under paragraph 1 to provide information, records and documents shall comply with such requests.Article 8 – Obligation of confidentiality of information
Persons authorized to oversee payment services and systems shall be obligated to respect professional confidentiality regarding facts acquired during such functions. On the basis of information acquired by oversight activities, the Central Bank may provide information summaries to a third person, in which the specific payment systems or payment service provider and the specific person must not be identified. Information acquired during the oversight may only be used by authorized persons in the fulfillment of their job responsibilities and in legal proceedings regarding an action against a decision issued by the Central Bank as regards payment services and/or systems oversight or in a similar proceeding before a Court.If the Central Bank discovers facts during its oversight indicating that criminal acts have been committed it shall notify the relevant entity regarding criminal proceedings of this fact without unreasonable delay.Article 9 – Outsourcing of activities
Where an operator intends to outsource operational functions of a system, it shall inform the Central Bank in conformity with Article 11, paragraph (2).Outsourcing of important operational functions may not be undertaken in such way as to impair materially the quality of the operator's internal control and the ability of the Central Bank to monitor the operator's compliance with all obligations laid down in this regulation.For the purposes of the second subparagraph, an operational function shall be regarded as important if a defect or failure in its performance would materially impair the continuing compliance of a System with the requirements of its license, or its financial performance, or the soundness or the continuity of its activities.The Central Bank shall ensure that when an Operator outsources important operational functions, it complies with the following conditions:a)the outsourcing shall not result in the delegation by senior management of its responsibility;b)the relationship and obligations of the Operator towards the Participants shall not be altered;c)none of the other conditions subject to which the license was granted shall be removed or modified.Article 10 – Liability
When a system relies on third parties for the performance of operational functions, the Operator shall take reasonable steps to ensure that the requirements of this regulation are complied with.Article 11 – Reporting duties
The operator of a system is required to submit to the Central Bank a report on a monthly basis of the transactions processed by the system in terms of value and volume.When parts of the activities of the system are outsourced, the operator shall communicate the following information to the Central Bank:a)a clear description of the activities outsourced,b)the name and corporate organization of the third party;c)the contractual arrangements under which the activities are outsourced,d)the identity of directors and persons responsible for the management of the outsourced activities within the third party and evidence that they are fit and proper persons;(e)the monitoring systems implemented by the Operator to ensure proper control and protection from any risk because of the outsourcing of such activity.Any changes or enhancements that shall expand the scope or change the nature of services or activities as originally notified shall be reported to the Central Bank and subject to prior approval of the Central Bank.Article 12 – Oversight fees
Without prejudice to the article 11 of regulation n° 002/2010 of the national bank of Rwanda governing payment services providers, an annual oversight fee of 5, 000, 000 Frw will be payable not later 31st of January of every year before that the license for systems be renewed.Article 13 – Sanctions
Whoever operating any system without a proper authorization of the Central Bank will be sanctioned in accordance with article 24 of the law n° 03/2010 of 26/02/2010 concerning payment system and required to cease any relevant activities.Article 14 – Cooperation with other authorities
The Central Bank may co-operate with other oversight authorities both inside and outside the country for oversight of payment systems and payment services. The Central Bank shall have the right to exchange information with such authorities and persons authorised by the law and to notify them regarding deficiencies found during their oversight activities.Other authorities and persons mentioned in paragraph 1 may only be provided with information under the condition that such authorities and persons have an obligation to protect the information and to respect confidentiality.Information provided shall only be used for the specific purpose or for the proceeding for which this information was made available. Information supplied to another country should only be in summary or aggregate form. No transaction details should be disclosed unless the affected participants and operator have been notified and agreed.The Central Bank may request all relevant information it might need for its oversight activities from oversight authorities of other countries, according to any cooperation agreement or the like.Chapter IV
Final provisions
Article 15 – Repealing provisions
All prior regulatory provisions inconsistent with this Regulation are hereby repealed.Article 16 – Commencement
This Regulation shall come into force on the date of its publication in the Official Gazette of the Republic of Rwanda.History of this document
30 December 2010 this version
Commenced
27 December 2010
Assented to