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Amendments to the Central
Bank of Malta Act which came into effect on 1 October 2002
entrust the Central Bank of Malta with the responsibility for
overseeing and regulating payment systems operating in Malta.
The amended Act also sets as an objective for the Bank the
promotion and participation in the establishment of a sound
and efficient payment system in Malta.
A payment system is defined in the Act as
a formal arrangement between three or more participants with
common rules and standardised arrangements, for the execution
of transfer orders between participants, including a clearing
house, or for the settlement of payments relating to securities,
which is approved by the Bank, and may include a payment, clearing,
settlement, netting and, or, similar system. The Act provides
that the Bank may also, on a case-by-case basis, designate as
a payment system such a formal arrangement between two participants
where the Bank considers that this is warranted on grounds of
systemic risk.
Central Bank of Malta
Directives related to Payment Systems
The Central Bank of Malta has issued the following
directives related to payment systems:
Directive
2: Payment and Securities Settlement System  (338kb)
This Directive
applies to the operation of, and the participation in, domestic
payment and securities settlement systems, as well
as to any other form of cash or security transactions, whether
domestic or cross-border that may be involved therein. This
Directive seeks to reduce the legal and systemic risks that
are associated with participation
in
payment and securities settlement systems and to
minimise the disruption to a system that can be caused by
insolvency
proceedings against a participant in that system.
Directive
3: Cross-border Credit Transfers (331kb)
This Directive regulates cross-border
credit transfers with the aim of promoting the efficiency
of
cross-border payments. It lays down the minimum requirements
needed to ensure an adequate level of customer information
both
before and after the execution of a transfer. The Directive
also stipulates minimum execution requirements, in particular
in terms of performance, which institutions offering transfer
services should adhere to, including the obligation to execute
a transfer in accordance with the customer’s instructions.
This Directive applies to transfers in euro as well
as currencies of scheduled states up to the equivalent of €50,000.
Directive
4: Electronic Payment Services (88kb)
This Directive seeks to ensure
a high level of consumer protection in the field of electronic
payment instruments and to promote customer confidence in, and
retailer acceptance of, these instruments, and to set out the
minimum requirements needed to ensure an adequate level of customer
information upon conclusion of an electronic payment contract
as well as subsequent to transactions effected by means of a
payment instrument. It should be noted that this Directive does
not apply to payments by cheques, and to the guarantee function
of certain cards in relation to payments by cheques.
Directive
6: Harmonised Conditions for Participation in TARGET2-Malta (639kb)
This Directive constitutes the legally binding contract that lays down the legal
framework for participation in the TARGET2 Malta component system. It provides
the access criteria for direct and indirect participation and the application
procedure, together with the provision of details of obligations of the parties,
the management activity of Payments Module accounts and the processing of payment
orders in line with SWIFT standards. The Directive also includes a description
of optional liquidity management features outlining the payments within the scope
of the system, and it establishes the
security and contingency requirements.
Directive
No 7: Provision of Intraday Credit (78kb)
This Directive seeks to lay down
the framework for the provision of intraday credit to eligible
entities.
Directive
No. 9: Collection of Information (571kb)
This Directive relates to the collection
of information by the Bank for the purpose of verifying and
monitoring compliance with other directives relating to payment
systems and services issued by the Bank.
Application Process
The Central Bank of Malta, as
the authority responsible to oversee and regulate payment
systems,
hereby draws the attention of all persons, whether corporate
or not, who are currently operating, or who intend to operate,
a payment system (as defined in the Central
Bank of Malta Act) in Malta, that
these operations require approval and authorisation under the
Central
Bank of Malta Act. Such persons are therefore
requested to contact the Central Bank of Malta to establish
whether or not their activities require approval and authorisation
under the Act. Enquiries and applications for approval and
authorisation are to be directed to The Manager, Payment
Systems Office.
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