PART II

Regulation of Payment Systems

5. —In this Part—

“existing payment system” means a payment system operating at the time of the commencement of this section;

“payment system” means a system established in the State, or proposed to be established in the State, by any person, in which credit institutions or financial institutions participate and which provides for—

(a) all or any of the following, namely, the processing, handling, clearance and settlement of any means of payment or of any securities, or

(b) the payment of any moneys by that means of payment, by or as between the members of the system or third parties, whether or not the processing, handling, clearance, settlement or payment of any of the moneys takes place in part or in whole within the State or outside the State;

“rules”, in relation to a payment system or a proposed payment system, means the rules governing or proposed to govern the membership and operation of the payment system.

6. —The Bank may become a member of, or be a party to the establishment or operation of, a payment system.

7. —No payment system, other than an existing payment system, shall be established or operated unless the persons who propose to establish the system have submitted the rules for such a proposed payment system (in this part referred to as a “proposed system”) to the Bank for approval and the Bank has approved of those rules.

8. —(1) Within three months of the passing of this Act, every payment system which was in operation before such passing (in this Part referred to as “an existing system”) shall—

(a) submit its rules to the Bank for approval, or

(b) cease to operate.

(2) Pending a decision by the Bank to approve or not to approve of the rules of an existing system submitted to it under subsection (1) (a), the Bank may—

(a) impose on the system such conditions or requirements as it considers appropriate to impose, or

(b) issue a direction under section 12 as if the existing system were a system the rules of which had been approved of by the Bank.

(3) The operators of a payment system may appeal to the Court against the imposition of any condition or requirement or the giving of a direction under this section.

(4) On hearing an appeal under subsection (3) of this section, the Court may confirm, vary or rescind any condition, requirement or direction imposed under this section.

9. —(1) The Bank shall decide to approve or refuse to approve the rules of a system within three months of the receipt of a submission under section 8 (1) and where the Bank approves of the rules of an existing system or for a proposed system, it may—

(a) make its approval subject to conditions or requirements or both as it thinks fit, and

(b) at any time after approval, impose conditions or requirements or both on any class of payment system or amend or revoke any condition or requirement or both to which this subsection relates, whether or not previously amended by this subparagraph.

(2) Every condition or requirement imposed to which this subsection relates and every amendment thereto or revocation thereof shall be imposed, amended or revoked as the Bank sees fit in the interest of the proper and orderly regulation of the payment system concerned and of competition between payment systems and every such condition or requirement may be imposed on either or both—

(a) that class of payment system, and

(b) the members of that payment system.

(3) In respect of any condition or requirement to which subsection (1) (b) relates, a condition or requirement shall not be imposed, amended or revoked until—

(a) the Bank has notified the operators or, when appropriate, the members of the payment system of its intention to so impose, amend or revoke, and

(b) the Bank has considered any representations made by the payment system or any member thereof within such time limit as the Bank may specify when notifying the payment system.

(4) The approval by the Bank of the rules of, or for, a payment system shall not constitute a warranty as to the solvency of that system or of any member of that system and the Bank shall not be liable, by reason of its approval, in respect of any losses incurred through the insolvency or default of that system or any of its members.

(5) An application for approval of the rules of an existing system or for a proposed system shall be in such form and contain such particulars as the Bank may from time to time determine.

(6) The Bank shall not approve of the rules of an existing system or a proposed system unless the existing system or proposed system is a company incorporated under the Companies Acts, 1963 to 1990.

(7) The operator of an existing system or the promoter of a proposed system may appeal to the Court against the imposition of any condition or requirement within 21 days of the imposition thereof and the Court may, on hearing an appeal under this section, confirm, vary or rescind any condition or requirement under this section.

10. —(1) The Bank shall not refuse to approve of the rules of an existing system or for a proposed system without the consent of the Minister and unless it is satisfied that the approval would not be in the interest of the proper and orderly regulation of such a system, and the Minister shall not consent to the refusal unless he or she is satisfied that the approval would not be in the interest of the proper and orderly regulation of such a system.

(2) Whenever the Bank proposes to refuse to approve of the rules of an existing system or for a proposed system—

(a) it shall notify the system or, in the case of a proposed system, the promoter of the system, in writing that it intends to seek the consent of the Minister to the proposed refusal and of its reasons for the refusal and that the system or the promoter may, within the period of 21 days after the date of the giving of the notification, make representations in writing to the Minister in relation to the proposed refusal,

(b) the operators of the system or the promoter may make such representations in writing to the Minister within the time aforesaid, and

(c) the Minister shall, before deciding to give or withhold his or her consent, consider any representations duly made to him or her under this subsection in relation to the proposed refusal.

11. —Without prejudice to the provisions of section 9 , section 17 (which relates to books and records of holders of licences) (as amended by section 36 of the Act of 1989) of the Act of 1971 shall apply as if—

(a) every payment system to which this Part applies, and

(b) every member of that system,

who is not at the time of the commencement of this section the holder of a licence for the purpose of the Central Bank Acts, 1942 to 1989, and this Act, were the holder of such a licence.

12. —(1) Where the Bank is satisfied that a payment system or any member thereof has failed or is failing to comply with a condition or requirement under section 8 (2) (a) or section 9 , the Bank may give a direction to—

(a) the payment system to cease such activities as the Bank may specify, and

(b) any or all of the members of the payment system to cease operating as a member or members of that system,

for a specified period or until further notice by the Bank.

(2) (a) The payment system to which, or member or members thereof to whom, a direction is given under subsection (1) may apply in a summary manner to the Court for, and the Court may grant, an order setting aside the direction.

(b) The Bank may apply in a summary manner to the Court to have a direction by it under this section confirmed by the Court.

(3) The Court when considering the matter may make such interim or interlocutory order as it considers appropriate.

(4) Where the Court is satisfied, because of the nature or the circumstances of the case or otherwise in the interests of justice that it is desirable, the whole or any part of proceedings under this section may be heard otherwise than in public.

13. —(1) The Bank may—

(a) revoke an approval of the rules of a payment system if the system to which it was granted so requests,

(b) with the consent of the Minister, revoke an approval of the rules of a payment system, if—

(i) the system—

(I) has not commenced to operate within 12 months of the date on which the approval was granted, or

(II) has ceased operating for a period of more than one month,

(ii) the payment system being a company, the company is being wound up,

(iii) the payment system (being an existing system) or the promoter of a proposed system has obtained the approval of the Bank through false statements or any other irregular means,

(iv) the payment system becomes unable to meet its obligations to creditors or suspends payment lawfully due by the system or by any member thereof, or

(v) since the grant of the approval, the circumstances relevant to the grant have changed and are such that, if an application for an approval were made in the changed circumstances, it would be refused.

(2) Whenever the Bank proposes to revoke an approval (other than in pursuance of a request by the payment system to which it was granted to do so)—

(a) it shall notify the payment system concerned that it intends to seek the consent of the Minister to the revocation and of the reasons for that revocation and that the system may, within 21 days after the date of the giving of the notification, make representations in writing to the Minister in relation to the proposed revocation,

(b) the payment system may make such representations in writing to the Minister within the time aforesaid, and

(c) the Minister shall, before deciding to give or withhold his or her consent, consider any representations duly made to him or her under this subsection in relation to the proposed revocation.

(3) Where an approval of the rules of a payment system is revoked and the system is not a company which is being wound up—

(a) the system and the members thereof shall continue to be subject to the duties and obligations imposed by or under this Part or section 18 of the Act of 1971 until all liabilities of the system and its members have been discharged to the satisfaction of the Bank,

(b) the system shall, as soon as possible after the approval is revoked, notify the Bank and such other persons (if any) as the Bank indicates are to be notified of the measures being taken or proposed to be taken to discharge in full and without undue delay the liabilities of the system and the members thereof,

(c) in the case where—

(i) that payment system has notified the Bank in accordance with paragraph (b) and the Bank is of the opinion that the measures being taken or proposed to be taken for the purposes of that paragraph are not satisfactory, or

(ii) that payment system has not so notified the Bank and the Bank is of the opinion that the system has failed to so notify as soon as possible after the approval is revoked, or

(iii) the Bank is of the opinion that the payment system has failed to take all reasonable steps to notify persons that the Bank has indicated, under paragraph (b), are to be notified,

then, the Bank may give a direction in writing to that payment system or to any of its members for such period, not exceeding six months, as may be specified therein, prohibiting the payment system or the members thereof so directed from—

(I) dealing with or disposing of any assets or specified assets of the payment system or of its members in any manner, or

(II) engaging in any transaction or class of transaction or specified transaction, or

(III) making payments,

without the prior authorisation of the Bank, and the Bank may require that payment system or any of its members to prepare and submit to it for its approval within two months of the direction, a scheme for the orderly discharge in full of the liabilities concerned.

(4) (a) Where the approval of the rules of a payment system is revoked and the system is a company which is being wound up, the liquidator of the company shall, in addition to the duties and obligations in respect of the winding up, be subject to the duties and obligations to which the payment system would be subject were it a payment system to which subsection (3) relates and that subsection shall, for the purpose of this subsection, be construed accordingly.

(b) Notwithstanding paragraph (a), the Bank may, where it revokes an approval and considers it appropriate in the circumstances, remove in writing the duty and obligation imposed on the liquidator concerned to comply with paragraph (b) of subsection (3) and may impose in writing on that liquidator such further or other duty and obligation which corresponds to that set out in the said paragraph (b).

(c) Nothing in this subsection shall be construed as affecting any duty or obligation under this Part of the members of the payment system concerned.

(5) The Bank shall as soon as may be after the revocation of an approval of the rules of a payment system publish a notice of the revocation in such manner as it thinks fit.

(6) (a) The system to which a direction was given under subsection (3), or a liquidator to whom a direction was given under subsection (4), may apply in a summary manner to the Court for, and the Court may grant, an order setting aside the direction.

(b) The Bank may apply in a summary manner to the Court to have a direction by it under this section confirmed by the Court.

(7) The Court when considering the matter may make such interim or interlocutory order as it considers appropriate.

(8) Where the Court is satisfied, because of the nature or the circumstances of the case or otherwise in the interests of justice, that it is desirable, the whole or any part of proceedings under this section may be heard otherwise than in public.

14. —Any person who contravenes section 7 or section 8 (1) and a payment system or a member thereof who—

(a) commits by act or omission a breach of a condition or requirement duly imposed and which relates to the approval by the Bank of the rules of the system, or

(b) fails by act or omission to comply with a direction confirmed by the Court under section 12 or section 13 ,

shall be guilty of an offence and shall be liable—

(i) on summary conviction, to a fine not exceeding £1,500 or, at the discretion of the court, to imprisonment for a term not exceeding 12 months, or to both, or

(ii) on conviction on indictment, to a fine not exceeding £50,000 or, at the discretion of the court, to imprisonment for a term not exceeding five years, or to both,

and

(iii) if the contravention, breach or failure in respect of which such person, payment system or member was convicted is continued after conviction, that person, system or member shall be guilty of an offence on every day on which the contravention, breach or failure continues after conviction in respect of the original contravention, breach or failure and for each such offence that person, system or member shall be liable on summary conviction to a fine not exceeding £100 or on conviction on indictment to a fine not exceeding £5,000.

15. —In approving the rules of a payment system or in imposing terms and conditions for the operation of a system, the Bank may, without prejudice to any other requirement it sees fit to impose in the interests of the proper and orderly regulation of the system, impose conditions in relation to all or any of the following:

(a) the requirements for membership and rules of operation of the system;

(b) the code of conduct to be followed by the members of the system;

(c) the apportionment of costs as between the members themselves or between the members and the system;

(d) the fees, contributions or any other financial requirement in relation to membership of a payment system whatsoever imposed or to be imposed on an existing member of the system or an applicant for membership of the system.

16. —Section 26 of the Act of 1971 is hereby amended by the substitution for subsection (7) (inserted by section 42 of the Act of 1989) of the following subsections:

“(7) The Minister may, after consultation with the Bank and where he or she is of the opinion that the proper and orderly regulation of financial markets so requires, by order—

(a) in the case of either or both subsections (2) and (3) of this section, apply those subsections or restrict their application to any class of persons, and

(b) in the case of subsection (6) of this section, amend that subsection by the addition thereto or deletion therefrom, of any instrument specified in that subsection,

and, in the case of each subsection, whether or not previously affected by virtue of this subsection.

(8) In this section ‘holder of a licence’ shall be deemed to include a credit institution within the meaning of Regulation 2 of the European Communities (Licensing and Supervision of Credit Institutions) Regulations, 1992 (S.I. No. 395 of 1992).

(9) Where the Minister is of the opinion, after consulting the Bank and such other Ministers (if any) as he considers it appropriate to consult with, that there are adequate supervisory and inspection provisions contained in any enactment relating to a financial institution or a class or type of institution to which the provisions of this Chapter would apply, then the Minister may by order specify the enactment concerned and, where necessary in the context of that enactment, the institution or class or type of institution to which the order relates and, accordingly, those provisions shall not apply to an institution to which the order relates.

(10) The Minister may, after consulting the Bank and such other Ministers (if any) as he considers it appropriate to consult with, by order, revoke an order, under subsection (9).”.

17. —The Bank may exempt a payment system or a class of payment system from some or all of the requirements of this Part on such terms and conditions as the Bank may decide, where it is of the opinion that the application of this Part to that system or class of system is not necessary in the interest of the proper and orderly regulation of financial transactions in the State.

18. —(1) Subject to subsection (2), the Minister may, after consultation with the Bank, prescribe the fee to be paid to the Bank by any person supervised or regulated by it under any enactment and different fees may be prescribed for different classes of persons.

(2) Where the Minister proposes to prescribe a fee under subsection (1), he or she—

(a) shall notify the persons of the class to which the proposed fee relates of that proposed fee, and

(b) shall not prescribe the fee until he or she has considered any representations made to him or her within such period, being not less than two months after the date the notification was sent to each person concerned.

19. —Where any credit institution instructs the Central Bank to make a payment to the Central Bank or to another credit institution that instruction may not be revoked on or after the debiting of the account of such credit institution.

20. —Notwithstanding anything to the contrary contained in any enactment relating to settlement or other accounts held at the Bank, all payment instructions and authorisations to and from the Bank shall be effective if made through a computerised system established by the Bank or in any other electronic form and not otherwise recorded within the Bank (without the need for an instrument in writing).

21. —The following section is hereby substituted for section 7 of the Act of 1942:

“7.—(1) It shall be lawful for the Bank to do all or any of the following things, that is to say:

(a) buy or sell coin or gold or silver bullion, or other precious metal, or any currency or currency units, however described;

(b) receive deposits;

(c) open accounts in other countries or act as agent, depository, or correspondent of any credit institution carrying on business in or outside the State;

(d) with the consent of the Minister acquire, hold, or dispose of shares in a bank or other institution formed wholly or mainly by banks which are the principal currency authority in their respective countries;

(e) re-discount any exchequer note or bill, local authority bill, bill of exchange or promissory note on such terms and conditions as the Bank sees fit;

(f) make loans or advances to credit institutions on the security of such assets and subject to such terms and conditions as the Bank sees fit;

(g) fix and publish from time to time the minimum rate or rates at which the Bank may re-discount any bill or debt instrument or otherwise make funds available to credit institutions;

(h) buy, hold, or sell securities;

(i) keep registers of securities generally;

(j) operate or participate in any depository of securities or of other instruments;

(k) keep the accounts for the clearing and settlement of securities or payment instruments;

(l) become a member of, or a party to the establishment or operation of a payment system;

(m) operate or participate in any system that provides a settlement service for transactions in securities or other instruments for its members;

(n) enter into agreements with any depositories of securities or other instruments and to carry out any transactions under the terms of such agreements necessary for the settlement of transactions between members of such depositories and members of any depository operated by the Bank.”.

22. —(1) The Minister may make regulations providing for the regulation of cross-border credit transfers and, without prejudice to the generality of the foregoing, the regulations may provide, in respect of such credit transfers, for all or any of the following:

(a) transparency;

(b) periods of time within which establishments may be bound to make a payment;

(c) an obligation to execute transfers in accordance with instructions in payment orders, including instructions as regards allocation of costs;

(d) an obligation, in the event of non-execution of transfers, to refund an amount up to and including the full amount, interest and charges;

(e) dispute resolution procedures.

(2) In this section—

“cross-border credit transfer” means a transaction carried out on the initiative of an originator via an institution or its branch in one Member State of the European Union, with a view to making available an amount of money to a beneficiary at an institution or its branch in another Member State;

“transparency” means the making available to actual and prospective customers in writing, including where appropriate by electronic means, in a readily comprehensible form, information on conditions for cross-border credit transfers.