NOU 1996: 24

Betalingssystemer m.v.— Utredning nr. 3 fra Banklovkommisjonen

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2 Draft Act relating to Payment Systems, etc.

Chapter 1. Scope and Definitions

§ 1-1. Interbank systems, etc.

(1) The Act covers the establishment and operation in the Kingdom of Norway of systems based on common rules for the clearing, settlement and transfer of funds between banks (interbank systems).

(2) The term bank also includes any other institution with authorisation from the King to operate special systems for the clearing, settlement and transfer of funds, or to participate in such systems as referred to in the first paragraph.

(3) The Act also applies to a settlement bank or principal counterparty which is part of an interbank system. Norges Bank is only considered a settlement bank in relation to Chapter 4.

§ 1-2. Systems for payment services, etc.

(1) The Act applies to the establishment and operation in the Kingdom of Norway of systems based on standardised arrangements for the transfer of funds from or between customer accounts in banks and finance companies when transfer is based on the use of payment cards, numeric codes or any other form of independent user identification issued to an unrestricted range of customers (systems for payment services).

(2) The first paragraph also applies to systems for payments which are not linked to customer accounts in institutions mentioned in the first paragraph.

(3) The first and second paragraphs do not, however, apply to systems for prepaid cards when the prepaid sum does not exceed NOK 1000 or any larger sum stipulated by the King.

§ 1-3. International payments

(1) The King may issue more detailed rules regarding:

  1. Norwegian financial institutions' participation in foreign payment systems,

  2. the clearing, settlement and transfer of domestic and international payments.

§ 1-4. Definitions

(1) For the purpose of this Act the following definitions apply:

  1. clearing: formalised arrangement for netting payment obligations which arise between two or more banks or between banks and the settlement bank or principal counterparty,

  2. multilateral clearing: clearing between more than two banks so that each bank has one net payment position to be settled,

  3. settlement: the final transfer of funds from the originator's bank to the beneficiary's bank,

  4. settlement bank: account bank for participants in an interbank system which manages the gross or net settlement of participants' payment obligations,

  5. principal counterparty: an operator that assumes responsibility for ensuring that other participants honour their commitments. Norges Bank can also approve another institution as a principal counterparty,

  6. payment card: withdrawal, debit and credit card or similar card for withdrawing or transferring funds.

Chapter 2. Interbank Systems

§ 2-1. Purpose

(1) The purpose of the provisions in this chapter is to ensure that systems for the clearing, settlement and transfer of funds between banks are organised and operated in such a way that financial stability is maintained. Particular emphasis shall be placed on minimising risks resulting from payment and solvency difficulties of participants in such systems.

(2) The provisions shall also help to ensure that the general public has access to efficient and reliable domestic and international funds transfers, and promote the rational coordination of participating institutions' activities.

§ 2-2. Authorisation

(1) An interbank system cannot be established or operated without authorisation from the King.

(2) The King may decide that the first paragraph shall also apply to similar systems for the clearing, settlement and transfer of funds.

§ 2-3. Agreements

(1) Agreements pertaining to interbank systems shall specify the mutual rights and obligations of participating banks and the operator. This also applies if the settlement bank or principal counterparty is to be included in the system.

(2) An interbank system shall have an operator that is responsible for its establishment and operation. The operator shall be designated in the agreements. One of the participating banks or another company, foundation or association may be designated as operator.

§ 2-4. Application for authorisation

(1) The operator shall submit the application for authorisation to Norges Bank pursuant to § 2-2.

(2) The application shall include information regarding the owner and participants and a plan for the system's organisation and operation, including the distribution of responsibilities between banks and ­other institutions participating in the system.

(3) The application shall also provide information regarding the criteria established for direct and indirect participation in the system. If participation in the system is conditional on membership or capital contributions, the application should also specify these conditions.

§ 2-5. Enclosures to applications for authorisation

(1) The following shall be enclosed with the ­application for authorisation:

  1. the agreements, see § 2-3,

  2. conditions which shall apply between the operator and assistants,

  3. information regarding measures to safeguard technical operations, including contingency plans in the event of an interruption in operations, should the ordinary system cease to function,

  4. information regarding measures to limit risks in the system arising from payment and solvency difficulties of participants in such systems,

  5. information regarding the principles of linkage to systems for payment services and other funds transfers between customer accounts.

(2) Norges Bank may request more detailed information and may lay down more detailed rules as to the information to be included in the application.

§ 2-6. Notification of authorisation

(1) Norges Bank processes the application for authorisation.

(2) The operator will receive notification of authorisation. Terms and conditions may be laid down for authorisation.

(3) The King may stipulate more detailed requirements for activities, including capital and security requirements for the operator, settlement bank or principal counterparty.

(4) The decision regarding an application for authorisation shall be made within six months, unless special circumstances indicate otherwise.

Boks ED2.1  

Minority proposal ( Halvorsen, Løining and Rikheim)

§ 2-6. fourth paragraph is omitted.

§ 2-7. Changes and new agreements

(1) The operator shall notify Norges Bank of any significant changes as regards ownership, organisation, operations, etc. as referred to in §§ 2-3 to 2-5.

(2) Changes may be implemented unless otherwise decided by Norges Bank within two months after notification has been received.

(3) Norges Bank may issue more detailed rules on changes covered by this section, including rules governing exemption from the notification requirement. In cases of doubt, the King will decide whether the change requires new authorisation.

§ 2-8. Access to participate in interbank systems

(1) Banks which have the right to engage in activities in the Kingdom of Norway have the right to become a member of interbank systems and to utilise these systems in accordance with ordinary charges and terms. This does not apply if authorisation has been granted and the agreements stipulate special conditions for indirect or direct participation in the system.

(2) The King may prohibit the use of charges and other commercial terms deemed unsound or unreasonable, and in cases of doubt, may decide whether an interbank system is covered by the first paragraph.

§ 2-9. The operator

(1) The general manager of the operator's activities shall fulfil any necessary requirements regarding good conduct and experience. This also applies to board members.

(2) The operator shall suspend an institution from the system if continued participation would be at variance with § 2-1 or such circumstances prevail as those referred to in § 5-3. Before a decision is made regarding suspension, the case shall, to the extent possible, be submitted to Norges Bank.

(3) The King may require that a new operator be designated if the operator is no longer deemed fit to carry out operations.

§ 2-10. Supervision

(1) Norges Bank shall supervise the interbank systems and operators' activities. Norges Bank may enter into an agreement with the Banking, Insurance and Securities Commission on the distribution of supervisory responsibilities.

(2) Norges Bank may require that the operator provides information which Norges Bank deems necessary in order to ensure that the system is organised and operated in accordance with the provisions set out in or pursuant to this Act.

(3) If Norges Bank finds that the system is not organised or operated in accordance with the provisions stipulated in or pursuant to legislation, Norges Bank may order the operator to implement the measures necessary to remedy the situation.

Chapter 3. Systems for Payment Services

§ 3-1. Purpose

(1) The purpose of the provisions in this chapter is to ensure that systems for payment services are organised and operated in a way that promotes reliable and efficient funds transfers and rational and coordinated execution of payment services.

(2) The provisions shall also safeguard the interests of the user as regards freedom of choice, accessibility and transparency.

§ 3-2. Right to operate systems for payment services

(1) Systems for payments services may be established and operated by:

  1. A bank which has the right to engage in activities in the Kingdom of Norway and notification has been given pursuant to § 3-3,

  2. A finance or mortgage company which has the right to engage in activities in the Kingdom of Norway, when the company's authorisation includes such activities and notification has been given pursuant to § 3-3,

  3. A group of banks when an operator has been designated and notification has been given pursuant to § 3-3.

(2) Other institutions can only establish and operate systems for payment services when special authorisation has been granted pursuant to § 3-4.

(3) Pursuant to subparagraph c) of the first paragraph, the operator may be one of the participating banks or another company, foundation or association.

§ 3-3. Notification requirement

(1) Banks, finance and mortgage companies which want to establish and operate systems for payment services shall without undue delay give notification of the establishment of the system to the Banking, Insurance and Securities Commission.

(2) Notification shall contain the information required to evaluate whether the system will be organised and operated in accordance with § 3-1. Notification shall also contain the following information:

  1. agreements between participating institutions on the transfer or withdrawal of funds,

  2. agreements regarding the linkage of user locations,

  3. agreements between systems for payments services,

  4. use of payment cards, numeric codes or other forms of independent user identification which are to be used for funds transfers.

(3) In order to ensure that the purpose set out in § 3-1 is fulfilled, the Banking, Insurance and Securities Commission may require that certain standardised conditions be included in the agreements and may request further information.

§ 3-4. Authorisation

(1) Pursuant to the second paragraph of § 3-2, authorisation to establish and operate systems for payment services is granted by the King. Terms and conditions may be set for authorisation.

(2) Applications for authorisation shall be sent to the Banking, Insurance and Securities Commission which will process the application. In addition to conditions referred to in § 3-3, information regarding board members and the general manager shall be enclosed with the application.

(3) Authorisation shall be granted unless there is reason to assume that board members and the general manager do not fulfil the necessary requirements for good conduct and experience, and that authorisation would therefore have unfavourable consequences for users or would otherwise be at variance with legislation or the general good.

§ 3-5. General requirements for systems

(1) Systems for payment services shall be organised and operated in accordance with the purpose set out in § 3-1. The King may issue more detailed rules on the standardisation of agreements, conditions, technical aspects, etc. regarding systems for payments services.

§ 3-6. Linkage of payment cards

(1) The Banking, Insurance and Securities Commission can intervene to prevent the linkage of payment cards with other services, functions or discounts which are deemed to be at variance with the purpose set out in § 3-1 or to prevent the marketing of such cards.

(2) Intervention measures may include prohibition, injunctions or authorisation with certain conditions attached.

(3) The King may restrict access to linking other services, functions and discounts to payment cards by means of regulations.

Boks ED2.2  

Minority proposal ( Bjarkøy, Nygaard Ottesen and Stalheim):

§ 3-6. is replaced by a new § 3-6 which reads as follows:

§ 3-6. Linkage of payment cards

(1) Payment cards must not be combined

  1. with functions other than payment,

  2. with services which are not related to payment, or

  3. with discount schemes or other similar arrangements.

(2) The first paragraph does not apply if the functions, services or discount schemes mentioned are also offered independently of payment cards. In such cases, the marketing of these functions, services or discount schemes shall be carried out on equal terms, regardless of whether they are offered independently or in combination with payment cards.

Minority proposal ( Breck, Dalsøren, Gjønnes, Kobberstad, S. Melsom, Myhre, Skomsvold and ­Vannebo):

§ 3-6. is omitted.

§ 3-7. Costs connected to payment cards

(1) Costs incurred by the use of payment cards shall be distributed fairly between the card-issuer, card-holder and user location.

(2) The King may issue more detailed rules on which costs to be included, and the distribution between parties.

Boks ED2.3  

Minority proposal ( Breck, Dalsøren, Gjønnes, Kobberstad, S. Melsom, Myhre, Skomsvold and ­Vannebo):

§ 3-7. is omitted.

§ 3-8. Supervision

(1) The Banking, Insurance and Securities Commission shall supervise systems for payment services. The Commission may enter into an agreement with Norges Bank regarding the distribution of supervisory responsibilities.

(2) If the Banking, Insurance and Securities Commission finds that a system is not organised or operated in accordance with the provisions stipulated in or pursuant to legislation, the Commission may order the institution operating the system to implement the measures necessary to remedy the situation.

Chapter 4. Legal Protection and Security for Clearing and Settlement Agreements

§ 4-1. Clearing and settlement agreements

(1) Clearing and settlement agreements are valid also if one of the participants is placed under public administration or subject to insolvency proceedings, if the payment order has been received by the clearing house, principal counterparty or settlement bank before the decision regarding public administration or insolvency proceedings has been taken.

(2) Norges Bank may issue more detailed rules concerning the point at which different payment orders are deemed received, pursuant to the first paragraph.

(3) The King may decide that agreements entered into by Norwegian financial institutions with foreign interbank systems shall have the same legal effect as set out in this section.

§ 4-2. Registration

(1) A netting and settlement agreement does not have legal effect pursuant to § 4-1 unless the parties have registered the agreement with Norges Bank no later than one day before the decision regarding public administration or insolvency proceedings is taken for the party concerned.

(2) Norges Bank shall record the agreements received and parties to the agreements in a journal.

§ 4-3. Agreements on security

(1) Banks which participate in a multilateral netting and settlement system and which register the agreement pursuant to § 4-2, shall furnish security to the settlement bank or principal counterparty. The Banking, Insurance and Securities Commission shall be notified of this security. Norges Bank may stipulate requirements for the security furnished, and in special cases may waive the security requirement.

(2) § 23 of the Act relating to Savings Banks and § 5-7 of the Act relating to Creditors' Satisfaction of Claims do not apply to such security.

Chapter 5. Other Provisions

§ 5-1. Duty of confidentiality

(1) Employees and employee representatives in institutions governed by this Act have a duty of confidentiality with regard to any information they may receive concerning the business or private affairs of others, unless stipulated in legislation. This also applies to other persons who perform services for the institutions.

(2) Duty of confidentiality does not prevent board members or others who have authorisation from the board to provide other financial institutions with information received in the capacity of operator.

§ 5-2. Regulations, etc.

(1) The King may issue more detailed rules to supplement and delimit the provisions set out in this Act.

§ 5-3. Revocation of authorisation

(1) The King may revoke authorisation pursuant to § 2-6, see § 2-2, either wholly or in part, if:

  1. the operator has committed gross or repeated contraventions of its duties as stipulated in or pursuant to legislation,

  2. there are other irregularities on the part of the operator or other circumstances which give cause to believe that the system is not functioning in accordance with § 2-1,

  3. the operator is no longer engaged in active operations connected to activities requiring authorisation.

(2) The first paragraph also applies for authorisation pursuant to § 3-4.

§ 5-4. Penalties and coercive fines

(1) Any employee or employee representative in institutions governed by this Act who wilfully or through negligence contravenes the Act or orders or injunctions issued pursuant thereto, is punishable by fines, or in particularly aggravating circumstances by imprisonment up to one year, unless the offence is subject to severer penalty provisions. Penal provisions also apply to accomplices.

(2) Contravention of the provisions in or issued pursuant to this Act is an offence. The statutory limitation period for instituting criminal proceedings is five years.

(3) If injunctions pursuant to legislation are not complied with, the Ministry may decide that those persons or the institution that shall comply with the injunctions shall pay a daily fine until the situation is rectified. The imposition of a fine is a basis for enforcement by distraint.

§ 5-5. Entry into force. Transitional provisions

(1) The King shall decide when this Act shall enter into force. The different provisions may enter into force at different times.

(2) The authorisation requirement pursuant to this Act also applies to systems which are established when the Act enters into force. This also applies to the notification requirement pursuant to § 3-3. Transitional provisions will be issued by the King.

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