Central bank powers in the financial infrastructure and the revocation of the license

Gulf 365 – Abu Dhabi – Abu Dhabi follow-up: "Gulf 365"

Gulf 365 continues to issue Federal Decree No. 14 of 2018 concerning the Central Bank and the Organization of Financial Facilities and Activities issued by His Highness Sheikh Khalifa bin Zayed Al Nahyan, President of the United Arab Emirates, in which we move review the transfer of funds and settlement of securities transactions. As well as the powers and functions of the Central Bank in financial infrastructure systems.

* Section IV
* Financial infrastructure
* Chapter I: Transfer of funds and settlement of securities

Article (124)

Clearing and settlement transactions

1) The Central Bank has the following characteristics:

(A) The establishment, development and / or operation of one or more clearing and settlement systems for the transfer of funds, the settlement of securities issued by the Central Bank or the public sector and any other obligation between people involved in these systems, alone or in partnership with any other party or outsource to others.
(B) Link the systems referred to in paragraph a) of this section to similar systems both inside and outside the state.
C) Creation and / or operation of central depository systems for securities issued by the Central Bank or the public sector, as well as data on monetary and financial transactions traded in the State, linking them to systems similar to the inside and outside the state
(2) The Central Bank shall coordinate with the state supervisory authorities and other relevant authorities with respect to the establishment of the monetary and financial transaction data systems referred to in paragraph (c) of this Article. point 1) of this article.
(3) The board of directors shall make regulations respecting the regulations referred to in subsection (1) of this section, as well as the rules for participation and the rules for implementing related transactions.

Article (125)

Retail Payments and Related Electronic Services The Central Bank alone must:

1) The power to establish rules, procedures and procedures for electronic banking, digital cash, value-added facilities, regulation of electronic retail payment systems and electronic banking and financial services subject to its authorization and supervision.
(2) Take all measures and measures deemed appropriate to reduce risks to the state financial and economic system related to the processes and systems referred to in point (1) of this Article.

* Chapter II: Powers and functions of the central bank Related to financial infrastructure systems

Article (126)

Systems identification

(1) The Central Bank may determine the systemic importance of any financial infrastructure system if it believes that the failure of any transaction or the inefficiency of its performance adversely affects the day-to-day operations of financial institutions operating in the region. State or the stability of the financial system. Country.
(2) In determining a particular financial infrastructure system, one of the following conditions must be met:

(A) The system in question operates in the state;
B- The system concerned is able to accept the clearing and settlement of orders issued in national currency, without prejudice to the provisions of Article 28 of this decree.
(C) The system in question is capable of providing remittances, clearing or settlement of remittance orders in payment, which are denominated in any currency.
3) The Central Bank, if it intends to identify one of the financial infrastructure systems approved by it or of systemic importance, shall:
(A) by informing the system operator or the settlement facility of this system by formal notice, specifying the basis for this determination, as well as any conditions attached to the determination decision.
(B) Notice of at least ten (10) working days from the date of notification shall be given in the notice referred to in paragraph (a) of this section, during which time the notice shall be system operator or the settlement facility of this system can clarify his point of view or indicate the reasons for the absence of this system. .
(C) decide on the granting of the status of a specific system in accordance with the provisions of this Article, within a period not exceeding twenty (20) working days from the date of receipt of the response of the authorities concerned or the period of notice.
(4) The operator of the specified system or the system settlement facility concerned may appeal the limitation decision referred to in point (3) of this Article by submitting a request to the Claims and Appeals Committee in accordance with the provisions of Part Five of this Decree.
5) Clearing and settlement systems established, developed and / or operated in accordance with the provisions of article (124) of this decree-law are specific.
6. The Central Bank, if it intends to identify one of the financial infrastructure systems approved by any other regulatory authority of the state or other jurisdictions as being of systemic importance, shall communicate its opinion in this respect to the competent supervisory authority and the regulatory authority concerned, In the absence of any objection to this limitation, proceed as follows:
(A) notify the system operator or settlement facility by means of a formal notice setting out the basis for this determination, as well as any conditions attached to the determination decision.
(B) Not less than ten (10) business days from the date of notification shall be given in the notice referred to in paragraph (a) of this section, during which the operator of the system or the settlement facility of this system can clarify his point of view or indicate the reasons why this system is not specified. .
(C) makes its final decision on whether or not to approve the Central Bank's request to grant the status of a specific system to the system concerned in accordance with the provisions of this Article, within a period not exceeding twenty (20) ) working days from the date of receipt of the response from the authorities concerned, Reply
(7) The Central Bank shall remove the status of "specific system" for any financial infrastructure system that it authorizes or requests from the relevant regulatory authority if it considers that this system does not more legal importance. The settlement system of this system should be formally informed of this decision, if any.

Article (127)

Supervision of systems

(1) The Central Bank alone has the power to supervise the operations of the systems licensed by it and to ensure their reliability in accordance with relevant international standards. It may, in this regard, request the system operators or the settlement facilities of these systems to take the necessary measures and procedures:
2. The Central Bank shall be responsible for supervising the application of additional supervisory procedures and measures to specific systems approved by any other regulatory authority of the State or other jurisdictions, in cooperation and in in coordination with the relevant regulatory authority, and to this end requests the competent supervisory authority It comes:
(A) require the operators of the specified settlement systems or facilities to comply with the instructions issued by the Central Bank in this regard and relevant international standards;
(B) Check the correct and regular operation of the specified systems.
(C) Check the financial strength of the specific system operators and the settlement facilities of these systems, if necessary.
(D) Require operators of specified systems or facilities to provide such information as they deem appropriate to achieve their objectives and perform their duties.
3. The Central Bank may appoint experts and consultants specialized in financial infrastructure to assist in the performance of its duties in accordance with the provisions of Part IV of this Decree-Law in order to comply with the best international standards and practices in this area.

Article (128)

Suspend or cancel the license

(1) The Central Bank may suspend or cancel the license granted by it to a financial infrastructure system in accordance with the provisions of Articles 124 and 125 of this Decree, by notice to the system operator or the settlement facility of this Act. The notification mentioned in this clause must be notified at least twenty (20) working days from the date of notification, during which the operator of the concerned system or the settlement facility of this system, Objection to the decision of the Central Bank to suspend or cancel the license and to submit its objections Objection in accordance with the provisions of Part IV of this Decree-Law.
(2) The Central Bank, if it considers that a particular system authorized by one of the state supervisory authorities or other jurisdictions is no longer able to carry out its operations, may, by formal notification of the relevant regulatory authority, suspend or revoke the license of that system, Procedures in this regard, as the case may be, and the relevant regulatory authority has the right to approve or reject the request of the Central Bank. If approved, the procedures and controls in effect will be followed.
(3) In any case, the decision to suspend or cancel the license granted to a specific system shall not affect the effect of any settled or settled transaction via the relevant system before the suspension or termination takes effect .

Article (129)

Power to make regulations and instructions

1) The Board of Directors shall issue the regulations, rules, instructions, directives and work controls it deems appropriate for the implementation of the provisions of Part Four of this Decree-Law and to achieve the objectives of the Central Bank. and its functions,
Regulations, conditions and rules relating to licenses granted by the Central Bank, in accordance with the provisions of Articles 124 and 125 of this Decree-Law, applicable to the operators of financial infrastructure systems and the settlement facilities of these systems or of the persons participating in them .
(B) Regulations, rules and standards relating to the identification and monitoring of financial infrastructure systems, in accordance with the provisions of Articles 126 and 127 of this Decree-Law, and to monitor the operation of these systems and to establish compliance rules for the persons concerned.
(2) The Central Bank may exempt operators from financial infrastructure systems approved by it or its settlement facilities or persons generally involved therein, or in particular the provisions of regulations, instructions, rules, directives and controls of work that it emits.

Article (130)

Extension of irregularities

1) The Board of Directors issues a regulation specifying the types of breaches of infrastructure systems approved by the Central Bank. The following cases are considered to have violated the following conditions:
A) Violation of the operational requirements of the relevant rules, rules and procedures.
(B) The failure of the system operator or the settlement facility of this system to comply with the request of the Central Bank to provide the information or documents requested.
Failure to comply with the decisions and instructions of the Central Bank and to take no action that it deems necessary to bring the system into conformity with the criteria it has determined.
(D) The system operator or the settlement facility of this system fails to report any action taken under the alleged provisions of this system with respect to a participant person.
(E) Failure of a participant participant to inform the system operator and the settlement entity of this system and the Central Bank of a judgment confirming its liquidation or its implementation in liquidation.
F) The operation of a system without obtaining a license in accordance with the provisions of Articles 124 and 125 of this Decree-Law.
(G) Failure of the system operator or the settlement facility of this system to comply with a request from the Central Bank or any other governmental entity relating to a default of payment within a specified time period .
(H) the fact that a system manager has not notified the Central Bank bankruptcy or liquidation of a participant.
Provide the Central Bank with incorrect or misleading information.
J) Add an incorrect entry in a registry or any relevant document relating to a particular system or cause the modification, deletion or destruction of this restriction.
(K) Any other act relating to clearing and settlement transactions or payments for retail sale is deemed to be adverse by the Central Bank.
(2) The Central Bank may take appropriate measures and judgments to remedy the breaches referred to in point (1) of this Article and its method of settlement.
(3) The Central Bank shall formally notify, in accordance with Article 1 of this Article, the measures taken against it and grant it a period of not more than ten (10) working days from the date of the risks to form a appeal against the decision of the Central Bank. Complaint The complainant may appeal to the Appeals and Appeals Committee in accordance with the provisions of this Decree. In the event that the offender does not comply with the Central Bank's decision within the time limit specified in this section, the Central Bank's decision in this regard will be final and binding.

Chapter III: Transactions and Final Procedures

Article (131)

Final payment and settlement

(1) All transactions made through a financial infrastructure system that meets one of the conditions of limitation referred to in Article (2) of Article 126 of this Decree-Law shall be considered final and irreversible or canceled in the following cases:
Transfer of funds from or to the account of a participant.
B – Payment of the obligation to pay.
(C) Settlement of an obligation to transfer or transfer effective book values.
2. No transfer, cancellation, correction or correction of a transfer or settlement relating to the transactions referred to in point (1) of this Article may be annulled, annulled or rectified by judicial decision or by law.

** Article (132)

Priority in applying rules and procedures for financial infrastructure systems to general insolvency and bankruptcy rules and procedures

(1) From the beginning of the liquidation proceedings of the assets of a person in liquidation, insolvency, financial restructuring and bankruptcy, operations or proceedings carried out by means of financial infrastructure systems that fulfill one of the conditions laid down in point 2) of Article 126 This Decree-Law relates to:

A) a transfer order;
(B) any disposition of the property under the transfer order;
C) The arrangements made for these systems.
(D) The rules and procedures of these systems for the settlement of transfer orders that have not been processed in accordance with the assumed provisions of these systems.

(E) Any action taken to liquidate securities of interest to parties involved in such systems, in violation of their alleged arrangements.
(2) The director or governor of the bankruptcy or any other person designated to manage the insolvency in the event of bankruptcy or liquidation may not take any action contrary to the provisions of this Decree or may prevent or affect the alleged arrangements of the systems. referred to in point 1). .
(3) In the event of bankruptcy or liquidation, any obligation arising out of a transfer order under the deemed arrangements of the systems referred to in subsection (1) of this section may be reasoned only once the 39, transfer order or payment completed.
(4) No debt or other obligation may be used in accordance with subsection (3) of this section if it is not established for the purpose of debt settlement or exemption or replacement obligations, or a clear basis until the measures taken under the arrangements for such systems are completed.

Article (133)

Clear offsetting on the obligations of insolvent or insolvent parties

(1) The operator of a financial infrastructure system that fulfills one of the conditions of limitation referred to in paragraph (2) of Article 126 of this Legislative Decree shall net off all obligations the creditor or debtor of a person participating in the system, Before the competent court decides to declare bankruptcy or liquidate the person concerned.
(2) In the case of a clearing operation on a net basis as specified in point (1) of this Article:
(A) Obligations settled on a net basis are excluded from the rules and procedures of bankruptcy or liquidation.
(B) Net net obligations owing to or subscribed to a participant in the system that have not yet been settled are due to the participant and may be recovered in favor of the creditors and are subject to bankruptcy or liquidation, as the case may be.
(3) During the bankruptcy or liquidation proceeding, the net clearing transaction, which has been processed by the relevant system operator, as specified in subsection (1) of this section, shall not be canceled, not more than discounts paid in accordance with paragraph (A) of Article (2) of this Article.

Article (134)

Save the rights related to the transaction

(1) Where this Decree-Law does not provide for any express provision, this Decree shall not be limited by law, shall not be limited or impair:
Any right, property, interest, concession, obligation or liability of a person arising from a transaction related to a transfer order entered in a financial infrastructure system that meets one of the conditions referred to in point (2). 126).
(B) investigations, proceedings or damages for rights, property, interests, privileges, obligations or liabilities;
(2) Nothing in subsection (1) of this section shall be interpreted as requiring
A) Cancellation of any network compensation performed by the network operator concerned, whether under the conditions assumed or otherwise.
(B) Cancellation of any transfer order issued by a participant and entered into the relevant system.
(C) reverse a payment or settlement that has been made under the operating systems of the system in question.

Article (135)

Obligation of a participant to notify bankruptcy

(1) A person participating in a financial infrastructure system that meets one of the conditions of limitation referred to in point (2) of Article (126) shall inform the system operator or the settlement facility as soon as possible. of the system concerned, the relevant regulatory authority and the Central Bank: The occurrence of one of the following cases, whether in the State or in other jurisdictions:

An application for declaration of bankruptcy or liquidation.
(B) render a judgment declaring bankruptcy or liquidation.

(C) Open an application for bankruptcy or liquidation at the request of the owners or shareholders or the management of the participant.
(2) The person participating in the system shall not be deemed to have failed to notify that one of the situations referred to in point (1) of this Article has occurred within the specified time, if:
(A) has taken reasonable steps to comply with the provisions of point (1) of this Article;
(B) The parties referred to in point (1) of this Article shall have prior knowledge of the situation at hand when the participant is required to notify the regulatory operator in accordance with the provisions of this Article.