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IFSCA moves to regulate and strengthen Payment Systems

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The International Financial Services Centres Authority (IFSCA) has recently issued a consultation paper to introduce regulations to facilitate the establishment and operation of the “Payments Regulatory Board”. The IFSCA is authorised under the Payment and Settlement Systems Act, 2007 (PSS Act) to exercise the powers, perform the functions and discharge the duties through the establishment of a “Payments Regulatory Board”.
 
The proposed regulations specify the duties, powers and functions of the Payments Regulatory Board and stipulate the procedure to be followed during its meetings.
 
The envisaged powers and functions of the Board encompass the following key areas: (a) Formulating policies for the regulation and supervision of payment systems, encompassing electronic, non-electronic, domestic, and cross-border systems affecting transactions in IFSC; (b) establishing standards for payment systems; (c) authorising payment systems; (d) determining criteria for membership including continuation, termination and rejection of membership; (e) overseeing the administration of regulations and guidelines under the Act and the directions issued by the Authority to operators and participants of payment systems, taking necessary actions for compliance; (f) recommending administrative structure for effective regulation and supervision of payment systems; (g) safeguarding and protecting the interests of consumers and overall safety and soundness of the payment systems; (h) such other matters as are deemed necessary for the effective regulation and supervision of payment systems.
 
Further, IFSCA recently has notified the IFSCA (Payment Services) Regulations which provide for the registration and regulation of a Payment Services Provider in the IFSCA which include governance and risk management norms. The IFSCA had issued a revised consultation paper on the Payment Services Regulations recently in 2023 which was covered by Regstreet Law Advisorshttps://lnkd.in/dQVU5UdE. The notified regulations have shifted from the concept of “service relationships” as defined in the consultation paper to “third-party service relationships” which has a more robust definition in the notified regulations. Further,  a provision for taking action against registered Payment Service Providers who contravene the regulations has been included in the notified regulations.
 
A copy of the Consultation paper is enclosed herewith and available on the IFSCA website.
 
The notified IFSCA Payment Services Regulations are accessible at: https://lnkd.in/dMFr48K6
 
Readers are welcome to share their views with Regstreet Law Advisors on info@regstreetlaw.com.

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