CENTRAL BANK OF KENYA REGULATIONS FOR DESIGNATION OF A PAYMENT SYSTEM

Transcription

1 CENTRAL BANK OF KENYA REGULATIONS FOR DESIGNATION OF A PAYMENT SYSTEM 2013

2 Table of Contents PART I PRELIMINARY Citation Application... 3 Definitions... 3 PART II STATEMENT OF POLICY Purpose Scope Responsibility... Error! Bookmark not defined. PART III: APPLICATION PROCEDURES Pre application for Designation... Error! Bookmark not defined. 3.2 Incorporation... Error! Bookmark not defined. 3.3 Forwarding of Application... 4 PART IV INFORMATION REQUIRED... 4 PART V APPROVAL AND DESIGNATION Processing of Application Designation and notification by the Governor... 6 PART VI COMMENCEMENT OF OPERATIONS AS A DESIGNATED PAYMENT... 6 SYSTEM... 6 PART VII: EFFECTIVE DATE Effective date... 6 ENQUIRIES... Error! Bookmark not defined. 2 P a g e

3 REGULATIONS FOR DESIGNATION OF A PAYMENT SYSTEM PART I PRELIMINARY IN EXERCISE of the powers conferred by section 31 of the National Payment System Act 2011, the Minister for Finance makes the following regulations:- 1.1 Citation These regulations may be cited as the Regulations for Designation of a Payment System, Application These Regulations apply to all payment system providers who have been advised by the Central Bank according to Section 3 (8) of the National Payment System Act, 2011 to apply for designation Definitions Designated Payment System means a payment system designated in accordance with section 3 of the National Payment System Act, 2011 Payment System means a system or arrangement that enables payments to be effected between a payer and a beneficiary, or facilitates the circulation of money, and includes any instruments and procedures that relate to the system; Payment System Service provider Means any person provided for in the National Payment System Act, 2011 Other terms used in this regulation are as defined in the National Payment System Act. PART II STATEMENT OF POLICY 2.1 Purpose The purpose of this Regulation is: i. To provide information and guidance to payment service providers seeking to be designated to conduct business of a operating a payment system in compliance with the National Payment System Act, P a g e

4 ii. To provide a clear guide on the conditions one must fulfill to be granted designation status to offer Payment System services in Kenya. 2.2 Scope This regulation applies to all operators of payment systems seeking designation of their payment system. PART III: APPLICATION PROCEDURES 3.1 Forwarding of Application The applicants will complete An Application for Designation of a Payment System Form clearly providing all required information. The forms for completion have been prepared as part of this regulation and hard copies may be obtained from the Banking Department, Risk Management and National Payment System Department, Central Bank of Kenya or may be accessed on All applications duly completed including the additional information should then be submitted to the Central Bank of Kenya, P.O. Box , Nairobi, with the appropriate application fee (a bankers cheque payable to The Central Bank of Kenya, at least ninety (90) days prior to the proposed date of commencing operations. PART IV INFORMATION REQUIRED 4.1 Every applicant will be required to submit the following additional information A copy of the certificate of incorporation of the institution from the Registrar of Companies Memorandum and Articles of Association of the institution and that of a corporate body that proposes to have a significant shareholding in the company that proposes to be a payment System Service provider The latest audited balance sheet and profit and loss account for each of the three years preceding the date of the application if the applicant has been operating in any activity under any name and laws or in cases where any of the shareholders is a corporate body. Where the 4 P a g e

5 stakeholders are individual natural persons, personal statement of affairs for the past three years should be submitted. 4.2 In case of the applicant is an institution incorporated outside Kenya, an undertaking by the board of management or any other controlling authority to maintain minimum assigned capital of KShs 5 Million Shillings. 4.3 A declaration signed by every officer as specified in the application form. 4.4 The organization structure of the applicant if the applicant is a body corporate Detailed curriculum vitae of every director and any officer who is likely to take part in policy making and operation of the system; A schedule of current or proposed branches for the system proposed for designation clearly showing (a) The location (b) number of employees in the branch (c) the telephone numbers and contact persons Where the applicant is already in operation, the value and volumes of transaction in the six months to the date of application Proof of compliance with other relevant regulatory authorities in the case of international subsidiaries Where the applicant is a subsidiary of a foreign company, a letter of no objection from the home regulatory authority recommending them to establish a payment system in Kenya should be obtained. The letter should be forwarded directly to the Director, Banking, Risk Management and National Payment System Department, Central Bank of Kenya, P.O. Box , Nairobi There shall be an understanding that the home regulatory authority will exchange regulatory compliance information with the Central Bank of Kenya 4.5 There shall be a designation charge which will be levied annually. PART V APPROVAL AND DESIGNATION 5.1 Processing of Application Upon receipt of the application forms together with the attachments, Central Bank of Kenya will appraise the application and make appropriate recommendations to the Governor. 5 P a g e

6 5.1.1 A positive recommendation may be given only after the application fully satisfies all the set conditions and requirements. 5.2 Designation and notification by the Governor After the Governor s approval has been granted, Central Bank of Kenya will advise the applicants in on approval in line with section 3 (3) of the National Payment System Act The Governor will publish a Gazette notice in accordance with section 3 (1), 3(2) and 3(3) of the National Payment System Act A payment system service provider shall ensure compliance by the designated payment system to the National Payment System Act 2011, any conditions given in the Designation Gazette in the advice in above The conditions in the notice in may be varied in a manner consistent with the designation provisions laid out in section3 of the National Payment System Act PART VI COMMENCEMENT OF OPERATIONS AS A DESIGNATED PAYMENT SYSTEM 6.1 The applicants shall commence operations as payment service providers for a designated payment system upon publishing of the Gazette notice in above. 6.2 A copy of the gazette notice shall be kept at the head offices and all branches of the designated payment system 6.3 Where there is inconsistency between this regulation and the National Payment System Act 2011, the provisions of the Act shall supersede the provisions of this regulation to the extent of the inconsistency PART VII: EFFECTIVE DATE 7.1 Effective date 1 st July, These regulations shall be superseded by new regulations that may be issued from time to time. 6 P a g e