The governance policy for money handlers have been issued by monetary authorities over the weekend.
In a statement, the Bangko Sentral ng Pilipinas (BSP) said the issuance is part of their phased-in implementation of Republic Act 11127 or the National Payment Systems Act (NPSA) and is expected to support the adoption of the governance standards under the “Principles for Financial Market Infrastructures.”
These are internationally-recognized standards jointly issued by the Bank for International Settlements and the International Organization for Securities Commissions. They are applicable to financial market infrastructures that include payment systems.
The governance policy provides the regulatory expectations on the governance arrangements and standards that all Operators of Payment System (OPS) must adhere to, the Central Bank said. The policy also provides the criteria for qualification and grounds for disqualifications of individuals elected or appointed as directors or officers of an OPS.
Among the more salient calls of the guidelines include rules prohibiting concurrent directorships among a clearing switch operator (CSO), its critical service provider and the payment system management body that governs the automated clearing house for which such CSO renders clearing services.
The guidelines also set governance standards that prescribe the quality of stewardship among OPS given that these entities have critical roles in ensuring the smooth circulation of funds in the economy in a “safe, efficient, affordable and convenient manner.”
“While the policy seeks to address governance concerns that are particularly applicable to entities conducting business as OPS, the principles espoused under the policy issuance are broadly aligned with the governance standards applicable to BSP-supervised financial institutions (BSFIs) and the provisions of relevant domestic laws and regulations,” the BSP’s statement read.
Also, the BSP said more stringent requirements shall apply to operators of designated payment systems (ODPS) in view of the potential of designated payment systems to pose systemic risks to the financial system, consistent with the BSP’s proportional and risk-based approach to payment system oversight.
The BSP said the Circular gives OPS a period of six months to comply with general provisions of the issuance. However, the provisions on temporary disqualification of directors and/or officers of OPS take effect immediately, the monetary authorities said.
